January 29 (Renewables Now) - PG&E Corporation (NYSE:PCG) and fully-owned California utility Pacific Gas and Electric Company have formally filed voluntary petitions under Chapter 11 of the US Bankruptcy Code.
PG&E announced this today, adding that it also sought court approval to access USD 5.5 billion (EUR 4.8m) in Debtor-in-Possession (DIP) financing from JP Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo, all acting as joint lead arrangers.
The San Francisco-based holding company is burdened with liabilities following the 2017 and 2018 Northern California wildfires. The above-mentioned sum should help support its operations and ongoing safety initiatives, it said in a statement, adding that it expects the court to announce a decision in the coming days.
The court should also act on requests related to PG&E’s continuation of existing customer programmes, including such covering low income support and energy efficiency. The company noted it intends to pay suppliers in full under normal terms for goods and services provided on or after the filing date.
PG&E has appointed James Mesterharm and John Boken of AlixPartners LLP to serve as chief restructuring officer and deputy chief restructuring officer, respectively.
The utility serves roughly 16 million people across Northern and Central California. It has power purchase agreements (PPAs) with the operators of renewable energy plants such as the 550-MW Topaz solar power station and the 250-MW Genesis concentrated solar power (CSP) plant, as well as the 101-MW Hatchet Ridge wind farm, all located in California.
PG&E equipment has been blamed for causing wildfires in Northern California over the past couple of years and while an investigation conducted by the California Department of Forestry and Fire Protection (CAL FIRE) has shown that that is not the case when it comes to the 2017 Tubbs Fire, the company has still decided to proceed with the bankruptcy. This decision has been criticised by investors and state officials over the past few days, with shareholder BlueMountain Capital Management LLC calling the bankruptcy costly and unnecessary.
Last week, the investor announced plans to nominate a full slate of new directors to replace PG&E’s current board. Its slate will be unveiled no latter than February 21.
(USD 1.0 = EUR 0.875)