Exclusive: PG & E to hire head of restructuring in final bankruptcy preparation – sources

(Reuters) – PG & E Corp., the owner of a California utility, is preparing to appoint a restructuring chief as it finalizes preparations for the constitution of a bankruptcy file expected to arrive as early as Tuesday morning, said sources close to the case.

PG & E is planning to file an application for bankruptcy protection in a federal court in San Francisco, said these sources, partly to deal with estimated $ 30 billion worth of catastrophic fires over the past three years. last two years, which killed more than 100 people and destroyed many homes.

The San Francisco-based electricity supplier, with more than $ 18 billion in debt, is about to finalize talks to appoint James Mesterharm, a long-term turnaround specialist, as his chief restructuring, in order to help the company manage the bankruptcy proceedings, said these sources.

The company is pursuing its bankruptcy plan, announced earlier this month, even as some of its creditors proposed state-of-the-art bailout financing plans to prevent such a move, sources said.

The sources asked not to identify the discussions on the company's internal developments and warned that the appointment of Mesterharm was still being finalized Monday night. A spokesperson for PG & E did not immediately respond to a request for comment.

On Monday, the California Public Utilities Commission approved PG & E's plans to leverage up to $ 6 billion in so-called debtor-in-possession financing to help it operate under bankruptcy protection.

VETERAN DE KODAK, ZENITH

Mesterharm, General Manager of AlixPartners LLP, a consulting and turnaround company, previously served as Chief Restructuring Officer at Eastman Kodak Co during its bankruptcy proceedings. Other companies he has advised on restructuring include the owner of General Growth Properties and Zenith Electronics. He advised PG & E in the weeks leading up to the planned bankruptcy, the sources said.

A spokesman for AlixPartners did not comment immediately.

PG & E licensees have recently submitted multi-billion dollar bailout proposals to the company, sources close to the offer said. The proposals, which were also shared with California Governor Gavin Newsom, each proposed financing in exchange for debt that could be converted into equities when PG & E shares are traded at a certain price, the sources said.

A Newsom spokesperson did not immediately respond to a request for comment.

A group comprising investment companies, Apollo Global Management LLC, Citadel, Davidson Kempner Capital Management and Centerbridge Partners LP, has proposed a $ 3 to 5 billion financing, sources said. Another team from Elliott Management Corp and Pacific Investment Management Co offered $ 4 billion, they said.

Debaters either declined to comment, did not have an immediate comment, or did not respond to requests for comment.

The funding proposals came shortly after state investigators cleared any responsibility for PG & E during a fire in 2017 that devastated a wine region and killed 22 people.

PG & E is still under close scrutiny for the role of their equipment in a fire that broke out in November in the Paradise community of northern California, killing at least 86 people in the worst fire. catastrophic of the history of the state.

PG & E raised a number of disputes and a deterioration in the financial situation leading to the planned bankruptcy. In a securities deposit earlier this month, PG & E said that obtaining additional financing to avoid a bankruptcy filing, while possible, would be expensive, complicated and would not solve the company's fundamental problems. .

BlueMountain Capital Management LLC, at least one shareholder, has criticized the plan as a detriment to investors and has launched an effort to oust the entire PG & E board of directors.