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Bloomberg
PG&E Corp creditors, seeking to salvage their bid to take control of the bankrupt utility’s restructuring, sweetened their offer to wildfire victims and made new proposals aimed at winning over California Governor Gavin Newsom.
In a letter to Newsom, the creditor group said they are prepared to pay the victims $13.5 billion in cash upfront instead of using stock in the reorganised company to finance half of the settlement. The bondholders — led by Elliott Management Corp and Pacific Investment Management Co — also committed to address demands Newsom raised with PG&E, including a forming new board and making provisions for the option of state takeover. The group said they plan to make their pitch directly to those with claims from wildfires.
“We believe this is simply a better deal for the true victims of PG&E’s fires, the individuals who need this money as soon as possible so they can rebuild and move on,†the bondholders said in the letter.
The Elliott and Pimco group faces a big challenge in its effort after a bankruptcy judge approved the utility’s $13.5 billion settlement with fire victims and an $11 billion payout to holders of insurance claims. Those claimants are now required to support the company’s restructuring proposal as a condition of the agreements.
The official committee representing fire victims formally withdrew its support for the creditor plan.