PosiGen, a residential solar installer, is exploring debt restructuring options due to liquidity strain caused by rapid growth.

PosiGen, a national residential solar-installation company, is exploring restructuring options, including bankruptcy, due to liquidity strain caused by rapid growth. The Louisiana-based solar developer is working with White & Case and FTI Consulting for advice on debt restructuring. The company faces challenges in managing its debt as it scales its operations.

PositGen, a national residential solar-installation company, is currently exploring restructuring options, including bankruptcy, due to liquidity strain caused by rapid growth. The Louisiana-based solar developer is working with White & Case and FTI Consulting for advice on debt restructuring. As PositGen scales its operations, managing its debt has become increasingly challenging. This situation underscores the growing importance of private credit in providing flexible financing solutions for companies in distress.

Private credit's role in financing PE-backed businesses and distressed companies is evolving rapidly. With assets under management (AUM) projected to surpass $2.5 trillion by 2025, private credit is becoming a dominant force in addressing liquidity and capital needs. The private credit market has emerged as a cornerstone of modern capital markets, reshaping how companies are financed, restructured, and scaled [1].

The recent $4 billion private credit deal for Leaf Home, a residential services company owned by Gridiron Capital, illustrates how private credit can innovate capital structures to extend holding periods, optimize returns, and navigate a low-M&A environment. The transaction, led by Ares Management Corp. and Apollo Global Management Inc., combined $1.9 billion in preferred equity with a $2 billion debt package, enabling PE sponsors to retain control while deleveraging and scaling operations [2].

For PositGen, exploring private credit options could provide a pathway to refinancing existing liabilities and funding growth. Private credit managers like Apollo and Ares are leveraging their balance sheets and partnerships to offer tailored financing solutions, such as subscription facilities and NAV-linked loans, which can help manage liquidity without diluting ownership or triggering forced exits [3].

Moreover, private credit’s role in enhancing returns is evident in its capacity to replace high-cost debt with lower-cost, structured financing. For instance, Apollo’s debt package for Leaf Home likely includes floating-rate terms that align with current interest rate environments, reducing refinancing risks. Such structures also allow sponsors to return capital to investors through dividends or share repurchases, a critical consideration in a market where liquidity is scarce [4].

As PositGen navigates its restructuring options, it is essential to consider the broader trends shaping the private credit landscape. Regulatory scrutiny is intensifying, with the AIFMD 2.0 directive in Europe pushing for greater transparency and U.S. and UK regulators scrutinizing systemic risks. These developments are likely to standardize practices and attract institutional investors seeking higher yields in a low-interest-rate environment [5].

In conclusion, PositGen’s exploration of private credit options represents a strategic move to manage its liquidity strain and scale its operations. As private credit continues to mature, its integration into the capital stack of distressed companies will deepen. For investors, this means opportunities to access high-yielding, non-correlated assets while supporting innovation in sectors from residential services to renewable energy.