PG&E files for reorganization under Chapter 11
PG&E Corporation and its primary operating subsidiary, Pacific Gas and Electric Company filed Tuesday voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California.
“Our most important responsibility is and must be safety, and that remains our focus,” John R. Simon, PG&E Corporation Interim CEO, said. “Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires. We also intend to work together with our customers, employees and other stakeholders to create a more sustainable foundation for the delivery of safe, reliable and affordable service in the years ahead. To be clear, we have heard the calls for change, and we are determined to take action throughout this process to build the energy system our customers want and deserve.”
In conjunction with the filings, PG&E filed a motion seeking interim and final approval of the Court to enter into an agreement for $5.5 billion in debtor-in-possession (DIP) financing with J.P. Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo acting as joint lead arrangers.
PG&E noted that it expects the Court to act on an interim basis on the DIP motion in the coming days. The DIP financing would provide PG&E with capital to ensure essential maintenance and continued investments in safety and reliability for the expected duration of the Chapter 11 cases, PG&E said.
As part of the filings, PG&E also filed various motions with the Court in support of its reorganization, including requesting authorization to continue paying employee wages and providing healthcare and other benefits. PG&E also requested authority to continue existing customer programs, including low-income support, energy efficiency, and other programs supporting customer adoption of clean energy. PG&E noted that it intends to pay suppliers in full under normal terms for goods and services provided on or after the filing date of Jan. 29.
PG&E appointed James A. Mesterharm, a managing director at AlixPartners, LLP and an authorized representative of AP Services, LLC, to serve as chief restructuring officer. PG&E also appointed John Boken, also a managing director at AlixPartners and an authorized representative of APS, to serve as deputy chief restructuring officer.
