PG&E bondholders propose bankruptcy exit plan worth up to $30 billion

By Jim Christie SAN FRANCISCO (Reuters) - A committee of bondholders of PG&E Corp's utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion to help the California power provider emerge from Chapter 11 and pay off its liability from wildfires.

Reuters June 26, 2019 01:05:27 IST
PG&E bondholders propose bankruptcy exit plan worth up to $30 billion

PGE bondholders propose bankruptcy exit plan worth up to 30 billion

By Jim Christie

SAN FRANCISCO (Reuters) - A committee of bondholders of PG&E Corp's utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion to help the California power provider emerge from Chapter 11 and pay off its liability from wildfires.

In a filing with the U.S. bankruptcy court in San Francisco, the committee, made up of senior unsecured noteholders of Pacific Gas & Electric Co, also sought to terminate the utility's exclusive period for filing a Chapter 11 reorganization plan so the committee may file its own plan. PG&E has until Sept. 29 to file a plan.

PG&E has been too slow to file its own plan and "the need to exit bankruptcy expeditiously is paramount," the committee said in its filing, adding its plan would provide up to $16 billion to compensate all of PG&E's pre-bankruptcy wildfire claims.

The committee's plan would be funded by $18 billion in cash from bondholders in exchange for new common shares in a reorganized company, as well as $2.2 billion in insurance proceeds owed PG&E for wildfire losses.

Bondholders would also provide $4 billion in cash in exchange for new unsecured notes and $5.5 billion would be raised by selling new secured notes to third-party investors.

San Francisco-based PG&E sought Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires in Northern California in 2017 and 2018 that left the company anticipating $30 billion in liabilities blamed on its equipment.

The worst of the blazes, November's Camp Fire, leveled the town of Paradise and killed more than 80 people. It was the deadliest and most destructive wildfire of modern times in California.

A spokesman said the committee had no additional comment on the plan beyond its filing.

A spokesman for PG&E in an email to Reuters said the power provider is "committed to working together with our stakeholders through the Chapter 11 process to fairly and expeditiously resolve our liabilities resulting from the 2017 and 2018 Northern California wildfires, develop a more sustainable business model and continue delivering safe and reliable service."

The committee said in its filing that its reorganization plan will provide a "substantial" capital investment to fund improvements in PG&E's electric infrastructure to ensure reliable power service and meet California's renewable energy goals.

The committee also said its plan will provide for a quick exit from bankruptcy for PG&E that maintains an investment-grade rating for the power provider.

The committee's filing did not identify unsecured noteholders that would participate in the plan, but the largest stakeholders in the group include Pacific Investment Management Co LLC, Elliott Management Corp and Davidson Kempner Capital Management.

According to the committee's filing, terms of the plan will not affect PG&E's ratepayers and will provide for a $4 billion contribution to a fund for insuring against utility-related wildfire liabilities that California officials are considering establishing.

(Reporting by Jonathan Stempel in New York and Jim Christie in San Francisco; Editing by Matthew Lewis and Steve Orlofsky)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.