(Bloomberg) — Oaktree Capital Management has been buying up debt in Sunnova Energy International Inc. as the solar panel provider prepares for negotiations with its creditors to address its troubled capital structure, according to people familiar with the matter.
Oaktree has been making the purchases in recent days and has accumulated around $400 million of the company’s debt, said the people who asked not to be named discussing private information. Sunnova had more than $8 billion of net debt at the end of last year, including asset-backed facilities, according to its 2024 earnings statement.
Given the size of its position, Oaktree will help spearhead the discussions with the company, which earlier this month issued a going concern warning. A group of lenders is expected to start confidential talks with the company as soon as this week, the people added.
Following the warning, creditors organized in two groups, one advised by Akin Gump Strauss Hauer & Feld and Evercore Inc., and another advised by Paul Weiss Rifkind Wharton & Garrison and Ducera Partners. Recently, creditors decided to merge the groups and retained Paul Weiss as legal adviser and Evercore as financial adviser, the people familiar said. The Wall Street Journal was first to report on the creditor groups merging.
Spokespeople for Oaktree, Sunnova and JPMorgan Chase & Co., which is working with the company, declined to comment. Representatives for Akin Gump, Evercore, Paul Weiss and Ducera didn’t immediately reply to a request for comment.
Sunnova’s fortunes have dimmed as high interest rates and lower state incentives have made it more expensive for consumers to buy home solar equipment. The overall market for residential solar has been soft, with total US installations falling nearly 20% last year, according to BloombergNEF.
–With assistance from Mark Chediak.
(Updates with details on confidential talks in the third paragraph.)
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