Can the data centre’s lenders take security over rented generation, and who controls a change of owner?
Rented turbines stay the lessor’s property. The customer must keep them free of its creditors’ claims, carries the risk of loss and cannot move them, and the lessor removes them at the end. So the project’s lenders get no security over the equipment that powers the site. They have to rely on the contract staying in place. Assignment needs consent, except to a capable affiliate, and a change of control of the customer counts as an assignment.
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What the filed contracts say
Contract
What the filed wording says
Solaris turbine rental
Title stays with the lessor, and the customer must keep the equipment free of its creditors’ claims, clearing any within ten days.
Solaris turbine rental
The customer bears the risk of loss from delivery until return.
Solaris turbine rental
At the end of a term or on termination, the lessor may remove the equipment at the customer’s cost.
Solaris turbine rental
Either side may assign only with consent, not to be unreasonably withheld, or to a capable affiliate.
Solaris turbine rental
A change of control of the customer counts as an assignment and needs the lessor’s consent.
The filed wording
ownership of and title to the Equipment shall remain with and be held by Lessor at all times and Customer shall have no right, title or interest in the Equipment except for the leasehold interest as expressly set forth in this Agreement. Customer will keep the Equipment free and clear from any claims, liens, and encumbrances of Customer’s creditors and other persons asserting claims against Customer (each, an “Encumbrance”).
Mobile Energy Rentals (Solaris)–CTC Property amended and restated master equipment rental agreement for behind-the-meter turbines, section 6.01 · Solaris Energy Infrastructure 10-Q, Exhibit 10.4
Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.
InfraCompute Weekly
The week in compute finance, read from the filings.
Deals, terms and the clauses behind them, for the people financing data centres, GPU clouds and the power behind them. By Randeep Bubbra.
