March 27, 2019
SAN FRANCISCO (Reuters) – Bankrupt California power provider PG&E Corp won court approval on Wednesday for a $5.5 billion loan to help maintain electricity and natural gas delivery and for investments to reduce the risk of wildfires as it reorganizes.
San Francisco-based PG&E filed for Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires that struck California in recent years, some linked or suspected to be linked to the company’s equipment.
Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco approved the debtor-in-possession loan over objections of a committee representing victims of wildfires that wanted PG&E to fund a program for housing, food and other necessities for the victims before getting the financing approved.
PG&E filed for bankruptcy protection on Jan. 29 in anticipation of liabilities from the wildfires, including a catastrophic 2018 blaze, the Camp Fire. It killed 86 people in the deadliest and most destructive wildfire in California history.
The San Francisco-based owner of the biggest U.S. power utility warned in November it could face significant liability in excess of its insurance coverage if its equipment was found to have caused the Camp Fire that destroyed Paradise, California, last year.
PG&E has said it expects its equipment will be determined to have been an ignition source for the Camp Fire.
The financing will comprise a $3.5 billion revolving credit facility, a $1.5 billion term loan and a $500 million delayed-draw term loan.
Investment banks JPMorgan Chase & Co, Bank of America Merrill Lynch, Barclays Plc and Citigroup Inc will provide financing, the company said in a filing.
(Reporting by Jim Christie in San Francisco; Editing by Jeffrey Benkoe)