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PG&E says it has US$34.45b in debt financing for reorganisation
[SAN FRANCISCO] New York-listed Pacific Gas and Electric Company (PG&E Corp) said in court papers on Friday it has debt financing commitments of US$34.35 billion for a planned Chapter 11 bankruptcy reorganisation, countering a group of noteholders that has proposed its own reorganisation plan for the California power producer.
In a filing in US Bankruptcy Court in San Francisco, PG&E said the commitments are from leading money centre banks and have terms superior to those in the plan the noteholders want to file.
The commitments will "fully fund" a reorganisation plan so PG&E can have one confirmed by June 30, 2020, the California utility giant said.
PG&E has also obtained more than US$14 billion in equity commitments from other investors and has struck an US$11 billion settlement with an insurers group and a US$1 billion settlement with a group of local governments and public entities hit hard by the wildfires that pushed the company to file for bankruptcy.
San Francisco-based PG&E filed for Chapter 11 bankruptcy protection in January in the aftermath of blazes in 2017 and 2018 blamed on its equipment.
At the time, PG&E anticipated wildfire-related liabilities of more than US$30 billion.
A group of PG&E noteholders, including Apollo Capital Management and Elliott Management Corp among others, last week unveiled a revised version of their proposed reorganisation plan. It would put US$29.2 billion in new money into PG&E, up from a prior US$28.4 billion offer, in exchange for new debt and a controlling equity stake.
The committee representing individual wildfire victims in PG&E's bankruptcy supports the noteholders' plan as it would create a US$14.5 billion trust to pay their claims.
PG&E has proposed funding a trust to compensate the victims capped at US$8.4 billion.
Lawyers for the wildfire victims committee and the noteholders group will ask US Bankruptcy Judge Dennis Montali at a hearing on Monday for an order that would allow the noteholders group to file its reorganisation plan.
PG&E in its filing on Friday objected to that request, arguing it should remain the only party in its bankruptcy with the right to file a reorganisation plan, adding its plan will pay the company's debtholders in full.
The power provider also proposed a mediator be appointed to help it and its stakeholders try to craft a plan they can all support.
If PG&E resolves its bankruptcy by the end of next June, it can participate in a recently enacted, US$21 billion state fund to help California's investor-owned utilities pay for future wildfires liabilities.
PG&E has said that taking part in the fund, which the utilities would help support with contributions, will enhance its finances over the long term.
Lenders putting up debt financing for PG&E's planned reorganisation are JPMorgan Chase Bank, Bank of America, BofA Securities, Barclays Bank, Citigroup Global Markets, Goldman Sachs Bank USA and Goldman Sachs Lending Partners, according to a commitment letter attached to Friday's filing.