PG&E Corp. launched two public equity offerings totaling $5.23 billion as it prepares to exit the biggest utility bankruptcy in U.S. history, Bloomberg News reported. The company plans to raise $4 billion from a common stock offering and $1.23 billion from a separate sale of equity units, according to a statement yesterday. The offerings are expected to price this week and close on or about July 1, at which point PG&E aims to exit chapter 11. PG&E has already raised more than $13 billion in the debt markets to finance its bankruptcy, which began after its equipment sparked deadly wildfires in Northern California and saddled it with $30 billion in liabilities. PG&E’s case is the rare exception to the general rule that shareholders typically get nothing in bankruptcy. That’s because the utility’s shareholders negotiated a plan to raise billions of dollars to help pay off wildfire victims. The deal dilutes current shareholders, but it lets them keep their stakes. The equity units PG&E is offering will consist of prepaid stock-purchase contracts and an undivided beneficial ownership interest in specified zero-coupon U.S. treasury strips. Goldman Sachs & Co. and JPMorgan Chase & Co. are joint lead book-running managers for the offerings. Barclays, Citigroup Inc. and BofA Securities are acting as joint book-running managers for both the common stock and the equity units offerings.
