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
The U.S. Food and Drug Administration on Saturday authorized Johnson & Johnson's (JNJ) single-dose COVID-19 vaccine for emergency use. It is the first single-shot COVID-19 vaccine and the third COVID-19 vaccine for emergency use in the U.S. - the other two being Pfizer/BioNTech's BNT162b2 and Moderna's mRNA-1273. The U.S. Food and Drug Administration said that it will rapidly work toward finalization and issuance of an emergency use authorization of Johnson & Johnson's (JNJ) single-shot COVID-19 vaccine candidate. Billionaire Warren Buffett's Berkshire Hathaway Inc. (BRK.A, BRK.B) reported that its fourth-quarter net earnings attributable to shareholders rose 23 percent to $35.84 billion from last year's $29.16 billion, with earnings per share improving to $23,015 per Class A share from $17,909 per Class A share in the prior year.
RELATED NEWS
Follow RTT