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PG&E Plans $5.75 Billion Equity Raise to Fund Bankruptcy Exit

Submitted by jhartgen@abi.org on

California-based power provider PG&E Corp. said today that it plans to raise $5.75 billion from public offerings as it tries to emerge from chapter 11 protection by the end of this month, Reuters reported. Separately, the company said investors, including Appaloosa and Third Point, have agreed to purchase up to $3.25 billion of its stock once the company exits bankruptcy. PG&E said that up to $1.25 billion of its common stock offering is expected to be reserved for large shareholders, while up to 25 percent will be allocated to individual investors. The private placement will be at a maximum price of $10.50 per share, a discount of over 16 percent to the stock’s last close. Read more

In related news, PG&E Corp. is readying an $11 billion debt-financing package that may be sold to investors as soon as this week as the company prepares to exit bankruptcy, Bloomberg News reported. The financing includes $4 billion of high-yield bonds and a $750 million term loan led by JPMorgan Chase & Co. The remaining package consists of an investment-grade bond portion offered by Bank of America Corp., JPMorgan and other banks. The exit financing marks the near-conclusion of a complex chapter 11 protection that’s lasted over a year and seen wildfire victims fight for compensation. The utility company filed for relief from its creditors in January 2019 after its equipment was linked to wildfires that ripped through Northern California in 2017 and 2018. Bankers are targeting a timeline of next week for the debt offering, the people said, adding that PG&E is expected to market a $9 billion equity offering at a later date. The company has said in court papers that it expects to market the debt as soon as it gets confirmation of its plan, which could come as early as this week. Read more