PG&E Bankruptcy Update: Utility Secures $5.5 Billion In Financing

PG&E (PCG.F) has raised $5.5 billion to finance its bankruptcy filing after claiming it may be liable for the 2017 and 2018 Northern California wildfires.

The utility has secured four banks – JPMorgan Chase Bank, Bank of America, Barclays Bank PLC, and Citigroup Global Markets – that will provide debtor-in-possession (DIP) financing during the bankruptcy restructuring, which is anticipated to take two years, according to the SEC filing.

The DIP financing includes $3.5 billion in revolving credit as well as $1.5 billion in term loans and $500 million in delayed draw term loans.

“PG&E expects that the DIP Facilities will provide it with sufficient liquidity to fund its ongoing operations, including its ability to provide safe service to customers during the Chapter 11 cases,” the company said in the SEC filing. “PG&E currently expects the Chapter 11 cases to take, subject to satisfaction of certain terms and conditions, approximately two years.”

On Jan. 14, PG&E announced that it would be filing Chapter 11 bankruptcy at the end of the month. This is just two months after the California wildfires started. The company has said it may be liable for the fires as it was having issues with its transmission lines at the time.

Because of the wildfire liability claims, PG&E shares have lost more than 80 percent of their value, which caused the utility to seek bankruptcy protection, Business Insider reported. The company is facing upwards of $30 billion in liabilities associated with the wildfires, CNBC reported.

PG&E also filed for Chapter 11 bankruptcy protection in 2001. The process took three years to complete.

Investigators have not yet determined if PG&E was responsible for the Campfire blaze that killed 86 people – the deadliest wildfire in California history.

Shares of PG&E were up 11.96 percent as of 1:53 p.m. ET on Tuesday.