PG&E hedge fund owners propose $15 billion bankruptcy investment
Two hedge funds that own PG&E Corp. stock have said they are willing to invest as much as $15 billion to help the company exit bankruptcy protection.
Abrams Capital Management and Knighthead Capital Management, which are competing with bondholders and others for control of the company, sent PG&E board Chairwoman Nora Mead Brownell a letter on Wednesday outlining their plan. Through what is known as a backstop commitment, other investors would be allowed to buy new shares in the company and the funds would contribute the rest.
The hedge funds said in their letter, which was disclosed in a Securities and Exchange Commission filing on Thursday, that PG&E “faces a material need for new funding” because of the wildfire liabilities that prompted it to file for bankruptcy protection in the first place. They also cited the urgency created by California’s new wildfire law that pushes PG&E to resolve its bankruptcy case by the end of June 2020.
Additionally, the hedge funds said their plan to invest in PG&E is superior to the strategy advanced by bondholders who proposed their own large investment as a way to get the company out of bankruptcy protection.
Read more: https://www.sfchronicle.com/business/article/PG-E-hedge-fund-owners-propose-15-billion-14290677.php
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