Hedge fund BlueMountain Capital, which owned roughly 1.55% of outstanding shares in bankrupt utility Pacific Gas & Electric at Dec. 31, 2018, announced Friday it’s nominated 13 candidates for election to the company’s board.
The list of nominees includes several longtime executives of the utility and energy industries the hedge fund said it hopes will bring to the company “the skills, experience, and commitment that [it] needs.”
PG&E shareholders will vote for directors at the company’s annual meeting on May 21.
‘Good faith discussions’
“We have engaged in collaborative, good faith discussions with the company in an attempt to reach an agreement on the composition of a board that we believe has the experience, knowledge, and ability to turn around PG&E and build a sound future for the company and the people of California,” said the hedge fund, in a U.S. Securities and Exchange Commission filing, dated March 1, reviewed by Kallanish Energy.
BlueMountain said its slate of potential board members “is the product of an extensive and rigorous search process.” More than 170 candidates were evaluated, and interviews were conducted with more than 60.
“PG&E appreciates the constructive dialogue that it has had with shareholders and other stakeholders throughout this process,” PG&E said, in a press release. “PG&E expects to continue discussions with shareholders, including BlueMountain, and other stakeholders regarding the appropriate composition of the board.”
Mounting financial problems
The nomination of 13 new directors comes as California’s largest utility faces mounting financial problems for its role in a number of wildfires over the past two years. Though a final determination hasn’t been made yet, PG&E said last Thursday it believes it’s “probable” the utility’s equipment will be found to be the source of the 2018 Camp Fire, the deadliest in California’s history.
That fire resulted in 86 civilian deaths and the destruction of 13,972 residences, according to California’s government.
Based on the early findings of the California Public Utilities Commission (CPUC), the company said it is including a $10.5 billion pretax charge related to third-party claims in connection with the 2018 Camp Fire in its full-year and fourth-quarter 2018 financial results.
Wildfires present ‘extraordinary challenges’
“The company is facing extraordinary challenges relating to the 2018 Camp Fire and 2017 Northern California wildfires,” the company said, in a release.
“Management has concluded that these circumstances raise substantial doubt about PG&E Corp.’s and the utility’s ability to continue as going concerns.”
The power provider filed for bankruptcy in January and asked the court to approve a $5.5 billion debtor-in-possession financing. Expected costs for the company are as much as $30 billion, beyond what the company says it’s able to manage.
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