logo
Plus   Neg
Share
Email

Bankruptcy Court Approves PG&E's Reorganization Plan

PG&E said Sunday that its plan of reorganization was approved by the Bankruptcy Court on Saturday, June 20, 2020.

PG&E said it has completed the initial stage of its bankruptcy exit financing contemplated in its Plan of Reorganization.

As a result of its Chapter 11 proceedings, PG&E has been able to retire expensive high-coupon debt and replace it with lower cost debt, yielding significant annual savings for customers. These savings are estimated to be about $250 million annually. PG&E will reflect the savings in future customer bills later this year, the company said.

On June 16, the Utility raised $8.925 billion of debt, including about $3.5 billion of long-term debt to finance capital investments.

The remaining $2.4 billion of long-term debt and $3 billion of 2-year debt will be used to fund a portion of PG&E's initial contribution to the AB 1054 wildfire fund and to fund claims at emergence from Chapter 11. Interest expense for these latter items will be paid by shareholders.

On June 18, PG&E priced its debt raise of $4.75 billion, which is expected to close on June 23, subject to customary closing conditions. The cost of this debt will be borne by PG&E shareholders. PG&E has committed to suspend its common dividend until it has recognized $6.2 billion in non-GAAP core earnings, to support a plan for capital investment or to reduce Corporation debt in the coming years.

The lower cost of shareholder-funded debt of roughly $70 million compared to the prior expectations will provide additional flexibility for the company after emergence from Chapter 11, the company said.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Amazon.com, Inc. can be held liable for damages caused by defective goods sold on its Marketplace including third parties, according to a ruling by a California appeals court. The California Fourth District Court of Appeals was pronouncing the ruling in a case where a defective replacement laptop battery caught fire and inflicted a woman with third-degree burns. Facebook has launched "Voting Information Center" on Facebook and Instagram platforms, with a view to boosting the number of Americans vote in the upcoming U.S. presidential election in November. The social media giant's latest initiative is expected to help 4 million voters register this year, and help them navigate a 'confusing election process'. Epic Games Inc., the developer of popular game Fortnite, has filed lawsuits against both Apple Inc. and Google after they removed the game from their app stores. The development reflects disputes related to app store fee the tech giants take from each purchase. Epic Games, which has been against the 30 percent revenue cut the two tech giants take from paid apps, added a direct payment option.
Follow RTT