PG&E offering $13.5 billion in relief to wildfire victims

Bloomberg

Bankrupt utility giant PG&E Corp is trying to offer $13.5 billion in compensation to the victims of wildfires sparked by its power lines as part of a restructuring plan, according to people with knowledge of the situation.
In doing so, the San Francisco-based power company would be providing the same amount that a group of its creditors — led by Pacific Investment Management Co and Elliott Management Corp — has agreed to pay victims in a rival reorganisation proposal, said the people, who asked not to be identified because the negotiations are private. The two sides are at odds, however, over how to structure the payout and how much should come in the form of cash and stock, they said.
PG&E has spent months trying to come up with a restructuring plan that would get it out of the biggest utility bankruptcy in US history by the middle of next year. The utility went bankrupt in January after its equipment was found to have started a series of catastrophic wildfires in 2017 and 2018, burying it in an estimated $30 billion worth of liabilities.
California Governor Gavin Newsom has threatened a government takeover if the company can’t come up with a viable reorganisation plan soon. The judge overseeing the case has ordered PG&E and victims to meet and to try to hammer out an agreement. The parties were in mediation, people familiar with the talks said.
PG&E said in a statement that it “remains committed to working with the individual claimants to fairly and reasonably resolve their claims and will continue to work to do so.” The company noted that an initial restructuring plan it had filed in its bankruptcy case would have the utility “satisfying all wildfire claims in full.”
A committee representing wildfire victims in PG&E’s bankruptcy case declined to comment.
A group of creditors led by Elliott and Pimco have been pitching a rival restructuring plan for PG&E that would all but wipe out the shares of current stakeholders and hand them control of the
company.