PG&E noteholders look to file plan featuring $30 billion investment

By Caroline Salls

Pittsburgh, June 25 – An informal committee of PG&E Corp.’s unsecured noteholders is asking the U.S. Bankruptcy Court for the Northern District of California to terminate the company’s exclusivity so the noteholder group may file a competing Chapter 11 plan for the case, according to a motion filed Tuesday.

The committee said it believes its plan will allow PG&E to emerge from bankruptcy by the end of 2019 or soon thereafter, meaning the company will be out of bankruptcy well in advance of the 2020 wildfire season.

According to the motion, PG&E has not proposed any plan, either publicly or in talks with the noteholder committee, in the five months since it filed bankruptcy, and a new wildfire season has already begun.

In addition, the committee said the California governor’s new wildfire legislative package requires PG&E to emerge from bankruptcy by June 30, 2020 to allow it to access a proposed recovery fund.

“Despite the obvious urgency, the debtors have wasted crucial time needlessly overhauling its board of directors to protect and entrench the parochial interests of an aggressive new subset of equity holders,” the motion said.

Under its proposed plan, the committee said it is willing to fund reorganized PG&E with fresh equity, which will restore strong investment-grade credit metrics so the company can once again access low-cost capital going forward for all of its long-term infrastructure investments.

Specifically, the committee said its plan calls for the noteholders to provide an up to $30 billion new-money investment, the vast majority of which would come in the form of equity.

The noteholders said $16 billion, or $2 billion more under specified circumstances, of this investment would be used to compensate all holders of pre-bankruptcy wildfire claims against PG&E. The plan calls for PG&E to contribute $4 billion to establish a broad-based utility wildfire fund.

As a result, the committee said the plan would be rate-neutral for the company’s customers.

A hearing is scheduled for July 23.

The electric and natural-gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29 under Chapter 11 case number 19-30088.

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