AMP Solar Group: Carlyle To Invest In Company

Here’s a mystery for you. What are the implications of the announcement that Carlyle Group is making a $374mn investment commitment to AMP Solar Group ? As Carlyle’s press release says, the company :

…”is a global renewable energy infrastructure manager, developer and owner. Since 2009, the Company has successfully developed over 1.8 gigawatts of distributed and utility-scale renewable generation projects, hybrid generation plus storage projects, and stand-alone battery storage projects around the world. Amp Energy’s proprietary digital energy platform, Amp X, also provides a diverse portfolio of disruptive and interoperable solutions, including a state-of-the-art smart transformer, that enable real-time autonomous management and optimized dispatch of all forms of distributed generation and loads across the grid. The Carlyle investment will help catalyze the continued rapid growth of both Amp’s asset base and Amp X within its core markets of North America, Japan, Australia, Iberia and the UK.

Apollo Investment (AINV) has $10mn invested in equity in AMP Solar (owns 6.6%) and $13.2mn in a UK subsidiary, which goes by the name AMP Solar Group UK or Solarplicity. The former investment is valued at a (14%) discount to cost while the latter is valued at only $0.17 on the dollar. The debt and the preferred on the UK company is on non accrual so the entire $23.2mn which AINV has invested at cost is non-income producing.

We don’t know if Carlyle’s involvement validates the multi-year investment in AMP Solar and we will see either a sale of the BDC’s position to them or an increase in the business valuation. Maybe the debt to the UK operation – never very profitable as the yield was fixed at 4% – will return ? We just don’t know but hope to learn more from AINV when IVQ 2020 results are published and discussed in February 2021.