Bankrupt California power provider PG&E Corp. won court approval last week 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.
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.
San Francisco-based PG&E filed for Chapter 11 bankruptcy protection Jan. 29, following 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 (Dip) loan over objections of a committee representing victims of wildfires. They had requested PG&E fund a program for housing, food and other necessities for wildfire victims before getting financing approval, Kallanish Energy understands.
PG&E filed for bankruptcy in anticipation of liabilities from the wildfires, including a catastrophic 2018 blaze, known as the Camp Fire. It killed 86 people and is known as the deadliest and most destructive wildfire in California history.
The San Francisco-based parent of the biggest U.S. power utility (Pacific Gas & Electric) 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 last year.
PG&E has said it expects its equipment will be determined to have been the igniter for the Camp Fire.
Investment banks JPMorgan Chase & Co, Bank of America Merrill Lynch, Barclays and Citigroup will provide financing, the company said in a regulatory filing.
This post appeared first on Kallanish Energy News.