While some major companies in the energy sector are trying to raise money to finance themselves over the mess that the pandemic caused, others are filing for Chapter 11 bankruptcy to cover billions in damage settlements.
PG&E (Pacific Gas and Electric) is looking for money to cover the $25.5 billion paid to fire victims, insurers, and local government agencies. It all started in 2018 when the company pled guilty for 84 counts of involuntary manslaughter caused by what is now the "worst wildfire in modern state history," that took place in 2018 in northern California. It caused damages to more than 13,000 homes and 500 businesses. At that time, the California-based company agreed to pay the maxim fine of $3.5 million, and $500,000 for investigations. In January last year, the company filed for bankruptcy.
The company announced today that it managed to raise over $5 billion through a common share and equity unit offering. More than 420 million shares were sold at $9.50 after they have been discounted from Thursday's $49.73. Moreover, until now, it acquired more than $13 billion in debt markets to be able to finance the bankruptcy. According to it, it expects to emerge from Chapter 11 in July. The gross proceeds gathered until now are of $5.5 billion from $5.23 billion announced Monday.
The underwriters will be JP Morgan and Goldman Sachs and the book-running managers BofA Securities, Citigroup, and Barclays Plc. To this date, this is the largest utility bankruptcy in US history.
PG&E closed the trading session lower by 0.71% but gained 2.2% in after-hours.
Sources: finance.yahoo.com, reuters.com, nbcnews.com