PG&E receives $ 34 billion in debt financing in the midst of a credit fight

(Bloomberg) – PG&E Corp., which sought to fend off a group of bondholders trying to take control of the bankruptcy, said it has raised $ 34.4 billion in debt financing commitments for its planned reorganization.

The California utility giant has received the commitments from banks including JPMorgan Chase & Co., according to court documents filed Friday. The financing conditions are "far better than a rival proposal by the bond owner group led by Elliott Management Corp. and Pacific Investment Management Co.," the company said.

The funding was included in a filing by PG&E that defended its exclusive right to proceed with a plan to close the largest bankruptcy in US history. While the judge overseeing the case has already ruled that the San Francisco-based company will retain that control, the bondholder group is fighting to kill the exclusivity, allowing it to make a proposal that will anything but eradicate current shareholders and give creditors a controlling stake.

PG&E blasted the group's proposal in Friday's filing, saying it would lead to an "unjustified fall" of billions of dollars for creditors at the expense of shareholders and utility customers. The plan, for example, would reintroduce long-term debt at above market prices, PG&E said.

U.S. Bankruptcy judge Dennis Montali is scheduled to consider arguments over whether the company should retain its exclusivity during a hearing Monday. He signaled that he would put a high bar for creditors behind the $ 29.2 billion competing restructuring plan, sending PG&E shares at 14% on Friday.

Montali wrote in an order late Thursday that the case was already "fully briefed, argued and decided" when he ruled in August. The creditor group must explain "what has changed in such a short period of time to justify reversal of rates," he wrote.

The order may provide support to PG&E as it works to close bankruptcy in mid-next year.The company has been fighting creditors for months while struggling to balance the interests of taxpayers, shareholders, California regulators and The victims are fires ignited by the equipment. The blades forced PG&E to bankruptcy and salted it by an estimated $ 30 billion in debt.

PG&E said in its court papers Friday that it has made significant strides toward getting a It has secured over $ 14 billion in equity commitments and made up $ 11 billion with insurers and holders of insured claims, including Baupo the st group, which is also a major shareholder. The insurance group said Friday that it opposed Elliott's efforts to allow competing reorganization plans.

Four Victims

Elliott and the Pimco Group propose a restructuring that would pay out $ 25.5 billion to victims of wildfires and their insurance companies. A group of firefighter victims have opted out of the plan and support the creditors' request to remove PG&E from its exclusivity.

The PG&E filing Friday cited an e-mail exchange between a firefighter lawyer and Elliott to support the company's argument that the two were working for their own interests at the expense of other parties. After being informed by Elliott of a settlement between PG&E and insurance companies, one of Willy's lawyers, Frank Pitre, replied, "Let's get the deal done and screw them all up," according to the filing.

Pitre said in an email to Bloomberg that he will respond to the filing of PG&E in court. The creditor group declined to comment.

PG&E said that Elliott and the fire victims had presented "no evidence to support the magnitude of claims Elliott has undertaken to settle." The tool reiterated its proposal to enter into fire victims' mediation to reach a settlement.

Attorneys for victims of firefighting have expressed frustration over PG&E over having reached a settlement and moved last month to align themselves with Elliott and the other bondholders. PG & E's largest labor union, the official credit committee that includes power suppliers, and taxpayer advocates and its own gun exchange group, also supported the opening of the bankruptcy for competing plans in filings earlier this week.

However, Montali seems hesitant to give bondholders too much control over the company's way forward, said Katie Bays, a tool analyst for Sandhill Strategy LLC.

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