(Bloomberg) – PG & E Corp. rejected a $ 2.5 billion offer from San Francisco to buy the wires of the bankrupt supply giant within the city limits.
San Francisco's Offer Significantly Underestimates the Company's Assets and a Deal Would not Be in Sight Bill Johnson, PG & E's CEO, said in a May 7 letter to Mayor London Breed, his clients' best interests. "We can not accept your offer," Johnson said in the letter. "If we ever consider such sales, we are committed to achieving the highest and best value for these assets."
San Francisco has defined its takeover bid as a way for PG & E to raise funds and contribute to cover an estimated $ 30 billion. The damage caused by these flames forced the company to become the largest in January Bankruptcy of an energy supplier in US history. Now, the company has partnered with companies such as Pacific Investment Management Co. and activist investor Elliott Management Corp. competes for a restructuring plan.
"Not so welcome"
PG & E has proposed a restructuring that would allow existing shareholders to retain some of their stake in society. The pledge creditors cited by Pimco and Elliott would virtually wipe out current investors. The company's shares remained virtually unchanged in aftermarket trading.
The city of San Francisco did not immediately respond to a request for comment.
Scott Wiener, a Democratic senator from San Francisco who has supported a deal, said the rejection is not surprising, but the supporters will continue to press for bankruptcy. "We will not give up," he said over the phone. "Bankruptcy is an unpredictable process and we'll see what happens."
Wiener said that he had also considered what could be done to promote an agreement at the state level, but refused to give details.
While California's investor-owned utilities have traditionally had much influence in Sacramento, PG & E is "not so welcome and powerful anymore," Wiener said. Earlier this week, the utility company organized the largest preventive power outage in state history to prevent its power lines from causing forest fires in strong winds. The closures met with indignation from homeowners and businesses, prompting Governor Gavin Newsom to publicly blast PG & E for years of "greed and mismanagement" said. "More and more people understand that it is not up to the task."
(Updates with restructuring plan in the fourth paragraph.)
To contact the editors responsible for this story: Lynn Doan at [email protected], Pratish Narayanan
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