PG&E obtains $12 billion in additional new plan backstop commitments

By Caroline Salls

Pittsburgh, Dec. 11 – PG&E Corp. entered into new Chapter 11 plan backstop commitment letters under which additional investors have agreed to fund up to $12 billion to finance plan transactions through the purchase of common stock, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

As previously reported, PG&E initially entered into plan backstop commitment letters with investors who agreed to fund up to $14 billion to finance the plan. Additional backstop letters were also entered into November.

The company said the new commitment letters are similar to the ones received in November. However, the latest letters allow the backstop parties to terminate their commitments if PG&E entered into any third-party transaction to monetize any net operating losses or tax deductions resulting from the payment of pre-bankruptcy wildfire-related claims, in excess of the $1.35 billion of tax benefits to be used in the proposed plan, and the net cash proceeds of those transactions are less than $3 billion.

The electric and natural-gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 in the U.S. Bankruptcy Court for the Northern District of California under Chapter 11 case number 19-30088.

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