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PG&E wins bondholders' support of reorganisation plan

Image via Flickr/Joe Gratz (CC0 1.0)

January 24 (Renewables Now) - Pacific Gas and Electric Co (PG&E) and its holding company PG&E Corporation (NYSE:PCG) have reached a deal with bondholders on how to restructure the San Francisco-based utility’s debts.

PG&E said in a statement on Wednesday that it reached an agreement with all claim holders, resolving all issues related to the treatment of pre-petition funded debt, including post-petition interest amounts and make-whole premiums, under the company’s Chapter 11 Plan of Reorganization.

As part of the plan, the utility will issue new notes in satisfaction of existing high-coupon, long-dated senior notes, senior notes with near-term maturities and funded bank debt, thereby saving the company’s customers some USD 1 billion (EUR 905m). The plan also envisages the reinstatement of all other senior notes.

The announcement says further that the Ad Hoc Committee of Senior Unsecured Noteholders will withdraw its own Alternative Plan of Reorganization and back the PG&E plan.

“Over the last several months, we made significant progress in our Chapter 11 cases. We have settled with all pre-petition wildfire victims’ groups—individuals, insurance companies and public entities—and we’ve now reached an agreement with the bondholder group,” said Bill Johnson, CEO and president of PG&E Corporation.

The agreement has to be signed by January 28, 2020, by the holders of at least two-thirds of the principal amount of each class of notes being refinanced. The PG&E plan also needs the approval of the bankruptcy court. The company said it expects to amend its Plan of Reorganization in the coming weeks.

PG&E filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in late January 2019, as it was burdened with liabilities following wildfires caused by its own power lines. Last month, the company agreed to a USD-13.5-billion settlement that resolves all claims arising from the fires, including individual claims. PG&E will also compensate insurance subrogation claimants in the amount of USD 11 billion and pay USD 1 billion in full settlement of the claims of certain public entities like cities and counties.

Under the plan, PG&E will also assume all power purchase agreements (PPAs) and community choice aggregation servicing agreements.

(USD 1.0 = EUR 0.905)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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