San Francisco bids $2.5 billion for PG&E Corp.’s local assets

San Francisco has offered to buy the electrical equipment of bankrupt utility giant PG&E Corp. for $2.5 billion with respect to its restructuring plan submitted a few days before. This may have a huge impact on the bankruptcy case. Mr. London Nicole Breed, Mayor of San Francisco called the offer “fair, competitive, and equitable” in a statement reported by the city Sunday. He also added that the proposal would help the company for its financial stability. On Friday, Mr. Breed in a letter to PG&E made the bid. In an email on Sunday, the company refused to communicate regarding the offer. PG&E said that the sale of assets to the city would not fit in the best interests of their stakeholders and customers.

Meanwhile, the company is due to file a Chapter 11 reorganization plan in bankruptcy court by Monday. The plan includes an outline for repayment of billions of dollars in liabilities from wildfires in 2017 and 2018. The city’s offer may complicate PG&E’s fundraising efforts and develop a plan to withdraw from the largest public utility bankruptcy by next year in US history. In January, PG&E was forced to file for Chapter 11 to deal with about $30 billion in liabilities related to the devastating wildfires due to its equipment ignited in 2017 and 2018. The company suffered a major setback on Friday when it was forced to admit that a tax-free state bond plan aimed at raising funds to pay for wildfire victims failed in the Legislature at least till January. The Assistant General Manager of the Public Utilities Commission of San Francisco, Ms. Barbara Hale, said that they are trying to solve the financing gap and this could help them.

PG&E and the city of San Francisco have a long history of disputes. The city had accused the utility of obstructing the development of many infrastructure projects. Later this month, Mr. Breed and Mr. Dennis Herrera, city attorney of San Francisco scheduled a meeting with Mr. Bill Johnson, Chief Executive Officer of PG&E. The meeting was held to discuss their issues, and according to the offer it would provide a significant cash infusion to the utility.

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