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PG&E plans $5.75 bln equity raise to fund bankruptcy exit

Published 06/08/2020, 06:20 AM
Updated 06/08/2020, 06:50 AM
© Reuters. PG&E crew work to repair damage caused by the Camp Fire in Paradise

(Reuters) - California-based power provider PG&E Corp said on Monday it plans to raise $5.75 billion from public offerings as it tries to emerge from Chapter 11 bankruptcy by the end of this month.

Separately, the company said investors, including Appaloosa and Third Point (NYSE:TPRE), have agreed to purchase up to $3.25 billion of its stock once the company exits bankruptcy.

PG&E said up to $1.25 billion of its common stock offering is expected to be reserved for large shareholders, while up to 25% will be allocated to individual investors.

The private placement will be at a maximum price of $10.50 per share, a discount of over 16% to the stock's last close.

PG&E Corp's shares fell 12.5% premarket on announcement of the planned fundraises.

The utility is also preparing an $11 billion debt-financing package, an investor involved with the company's funding plan said on Friday.

Last month, the San Francisco-based utility's reorganization plan had been approved by a California power regulator.

© Reuters. PG&E crew work to repair damage caused by the Camp Fire in Paradise

The company needs to exit bankruptcy by June 30 to participate in a state-backed wildfire fund that would help reduce the threat to utilities from wildfires.

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