(Reuters) - Private equity firm Apollo Global Management LLC has amassed a 6 percent stake in Clearway Energy Inc, a renewable energy producer whose shares were hit after one of its customers filed for bankruptcy, people familiar with the matter said on Friday.

FILE PHOTO: Leon Black, Chairman, CEO and Director, Apollo Global Management, LLC, May 1, 2018. REUTERS/Lucy Nicholson/File Photo

Apollo’s move is a sign of confidence in Clearway, which cut its dividend from 33 cents to 20 cents per share last month amid concerns that California utility PG&E Corp could abandon its power purchase agreement with Clearway, a wind, solar and natural gas-fired power generation company.

PG&E filed for bankruptcy on Jan. 29, citing mounting liabilities, including the possibility its equipment set off the deadly Camp Fire, which destroyed the Northern California town of Paradise and killed 86 people.

Since November, Clearway’s shares have lost more than a fifth of their value as investors worried that PG&E will renege on its contract.

PG&E has $42 billion worth of contracts with about 350 energy producers, mostly solar and wind farms.

Credit ratings agencies have downgraded several renewable energy projects with significant revenue exposure to PG&E in the aftermath of its bankruptcy filing, including Topaz Solar Farms, owned by Warren Buffett’s Berkshire Hathaway Inc, and Genesis Solar Farm, developed by NextEra Energy.

The PG&E contract accounts for about 23 percent of Clearway’s cash flow. Clearway Chief Financial Officer Chad Plotkin told investors on the company’s fourth-quarter earnings call on Thursday that PG&E had continued to make payments, but that the cash did not flow to Clearway because of debt covenants in its renewable energy projects.

PG&E has not yet decided whether it will default on its power purchase agreements as part of its bankruptcy process. If it does, these contracts would have the same claim as $20 billion of unsecured bonds that PG&E has outstanding.

Were this to happen, Apollo believes PG&E’s contract to Clearway would pay in full, at 100 cents on the dollar, the sources said. Clearway currently has an equity cushion of $9 billion, a rare occurrence for a company in bankruptcy.

Apollo, which is one of PG&E’s biggest creditors, believes that the utility’s contract with Clearway has a value equivalent to $4.5 to $5 per Clearway share, according to the sources.

Apollo’s stake in Clearway is a passive trading position originating from the private equity firm’s global liquid credit business, that is co-led by Joseph Moroney and John Zito, the sources said.

Apollo declined to comment. Clearway, which is controlled by infrastructure investment firm Global Infrastructure Partners, did not immediately respond to a request for comment.

Clearway shares pared some losses and were trading down 2 percent at $14.71 in late morning trading in New York, giving the company a market capitalization of $2.8 billion.