PG&E Corp.’s preferred path out of bankruptcy protection relies partly on a new multibillion-dollar stockholder investment, but it’s still not clear exactly how much money the company wants to offer individual wildfire victims, the San Francisco Chronicle reported. More than 30 financial institutions have committed to investing upwards of $14 billion, according to a draft document obtained by the Chronicle that outlines the terms of PG&E’s plan to emerge from bankruptcy protection. The company and subsidiary Pacific Gas and Electric Co. intend to formally propose their plan by today. The document said that PG&E’s bankruptcy exit financing “is supported by a substantial infusion of cash raised from existing equity holders on market terms.” PG&E said it is on track to file its reorganization plan “on or before” Monday and is “looking at all options” while working with the governor, state regulators and others with a stake in the bankruptcy’s outcome. In addition to the infusion of cash, the company could also use debt to help pay fire victims and emerge from bankruptcy. Banks have “expressed high levels of confidence” that PG&E could secure $35 billion to $40 billion in debt and equity, according to the term sheet. Read more.
In related news, an effort by bankrupt utility giant PG&E Corp. to gain access to tax-free state bonds to help it pay for billions of dollars in wildfire liabilities has run aground in the California legislature, Bloomberg News reported. Lawmakers ran out of time to debate the measure, which would have let PG&E use future profits to finance up to $20 billion in bonds that would help cover damages tied to wildfires that its equipment ignited, according to the bill’s sponsor, Republican Assemblyman Chad Mayes. A group of PG&E shareholders plan to push for it to be reintroduced in January, their spokesman said. The San Francisco-based power company had left open the possibility that the bonds could be a significant piece of its restructuring, a draft term sheet obtained by Bloomberg News showed. The measure faced an uphill battle from the start. A group representing wildfire victims, Up From the Ashes, said it couldn’t support the bill unless PG&E reached a settlement with fire victims. Some lawmakers, consumer advocates and a powerful group of PG&E creditors, including Pacific Investment Management Co. and Elliott Management Corp., also opposed it. The group waged a lobbying campaign against the bill, calling it a “bailout” for PG&E’s shareholders. Read more.
