Holding company Pg&e Corp. said Friday it’s evaluating a proposal from hedge funds Knighthead Capital Management and Abrams Capital Management to provide $15 billion in equity capital commitments supporting a plan to reorganize the company.
“The Company has received the financing proposal from Abrams and Knighthead and is evaluating it, including the backstop commitment letters and related materials, in consultation with the Company’s advisors. The Company will respond to the proposal in due course,” Pg&e said, in a statement.
Shareholders Knighthead Capital and Abrams in a letter to Pg&e Thursday proposed raising $15 billion in equity to fund a planned reorganization of the power producer parent, which is facing as much as $30 billion in liabilities from California wildfires.
The two hedge funds combined own more than 7% of Pg&e shares outstanding, Kallanish Energy calculates.
The proposed fundraising, a rights offering of new shares is the latest effort to rescue Pg&e, which sought Chapter 11 bankruptcy protection this past March after wildfires in 2017 and 2018.
Knighthead and Abrams pledged to purchase a portion of the offered equity if shares are left unsold through a so-called backstop commitment.
Pg&e is the parent of electric utility Pacific Gas & Electric Co.
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