March 4 (Renewables Now) - Buyout firm Apollo Global Management LLC has built a stake of 6% in US renewable and conventional power producer Clearway Energy Inc (NYSE:NYLD) regardless of the uncertainty surrounding some of its supply contracts, Reuters reports.
Last month, the power producer’s board decided to reduce the dividend on the firm’s Class A and Class C common stock to USD 0.20 (EUR 0.176) per share for the first quarter of 2019 from a December distribution of USD 0.331 apiece. This, along with some other recently taken actions, reflect the late January announcement by PG&E Corporation (NYSE:PCG) that, alongside fully-owned California utility Pacific Gas and Electric Company, it had filed for bankruptcy.
Clearway Energy said in February that it owned or had invested in 1,200 net MW of electric generation projects that had long-term supply or capacity contracts with PG&E. The utility has not yet indicated what it plans to do in connection with such contracts.
In the event that PG&E decides to default on its PPAs, the contracts would have the same claim as USD 20 billion worth of unsecured bonds the utility has outstanding. Apollo, which is one of PG&E’s major creditors, believes that in this case the contract to Clearway would pay in full, Reuters said, quoting its sources.
(USD 1.0 = EUR 0.881)