Page 6 - ARUBA TODAY

A6 U.S. NEWS
Tuesday 17 March 2020
Court approves PG&E's $23B bankruptcy financing package

By MICHAEL LIEDTKE age or other aspects of his
BERKELEY, Calif. (AP) — Pa- talks with the company.
cific Gas & Electric on Mon- Newsom has intensified his
day won court approval to focus on the coronavirus
raise $23 billion to help pay during the past two weeks
its bills over destructive Cal- as the disease's outbreak
ifornia wildfires after Gov. worsened in California,
Gavin Newsom dropped but that doesn't mean the
his opposition to a financ- Democratic governor isn't
ing package designed to keeping a close watch
help the nation's largest util- on PG&E, said Jared Ellias,
ity get out of bankruptcy. a UC Hastings College of
The milestone reached dur- the Law professor who has
ing an unusual court hear- been tracking the case.
ing held by phone moves "The long-term health of
PG&E closer to its goal of PG&E has to remain a top
emerging from one of the priority because, God for-
most complex bankruptcy bid, if this coronavirus re-
cases in U.S. history by June mains a problem head-
30. ing into wildfire season this
Newsom has said he fears summer," Ellias said.
P&E is taking on too much In this Jan. 14, 2019, file photo, Pacific Gas & Electric vehicles are parked at the PG&E Oakland Besides issuing more stock
debt to be able to afford Service Center in Oakland, Calif. to raise money, PG&E and
an estimated $40 billion Associated Press its parent company will
in equipment upgrades take on as much as $11 bil-
needed to reduce the But the recent volatil- index to plunge by roughly heaval in the financial mar- lion in additional debt while
chances of its electric- ity in the financial markets 25% during the past three kets to persist, PG&E lawyer refinancing billions in exist-
ity grid igniting destructive caused by the coronavirus weeks. Because of the Paul Zumbro told U.S. Bank- ing loans.
wildfires in the future. pandemic apparently soft- company's already shaky ruptcy Judge Dennis Mon- PG&E primarily needs the
The utility's outdated sys- ened Newsom's stance af- condition, PG&E's stock has tali that the commitments cash to pay off $25.5 billion
tem triggered a series of ter PG&E lined up commit- been hit even harder, with are "critically important." A in claims as part of settle-
catastrophic wildfires in ments from investors prom- shares losing nearly half representative for Newsom ments reached with wildfire
2017 and 2018 that killed so ising to buy up to $12 billion their value during the same said the governor agreed. victims, insurers and gov-
many people and burned in company stock. Those stretch. The stock fell 12% "People often talk tough ernment agencies. That's a
so many homes and busi- guarantees are looming Monday to close at $8.95, when there is a level play- fraction of the more than
nesses that the company larger, given the turmoil its lowest price since early ing field, but in circum- $50 billion in losses that
had to file for bankruptcy that has caused the bench- December. stances, almost all people wildfire victims and insurers
early last year. mark Standard & Poor's 500 Given the potential for up- want to make deal," said had estimated PG&E owed
Eric Snyder, a bankruptcy them in the early stages of
lawyer who has been fol- the bankruptcy case.
lowing PG&E's case. Reflecting the complex-
Newsom has unusual lever- ity of the situation, Mon-
age over PG&E because tali conceded that the nu-
the company also needs ances of PG&E's financing
state approval of its bank- package are "beyond my
ruptcy plan to qualify for understanding" and put his
coverage from a wildfire faith in the parties who put
insurance fund that Califor- it together that it's now the
nia created last summer. best option available.
In a statement, PG&E said The unusual admission
it's making "good progress" came during an extraor-
in discussions with Newsom. dinary hearing that had
The governor's office didn't to be held by phone be-
immediately respond to re- cause Montali's court-
quests for comment about house was closed to try to
Newsom's change of heart help limit the spread of the
on PG&E's financing pack- coronavirus.q