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PG&E creditors propose $35 billion exit plan: Bloomberg

FILE PHOTO: PG&E crew work on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

(Reuters) - Some creditors of PG&E Corp, including Elliott Management Corp and Pacific Investment Management Co (Pimco), are proposing a $35 billion (£27 billion) plan for the California power utility to exit bankruptcy within a year, Bloomberg reported late on Wednesday.

Pimco, Elliott and David Kempner Capital Management have discussed the proposal with California lawmakers and other stakeholders, Bloomberg reported, citing sources familiar with the matter.

The plan is to form a $14 billion cash trust to pay for the claims linked to the wildfires in 2017 and 2018, it said, citing the proposal seen by the news outlet.

The proposal is being pitched on behalf of an ad hoc committee of PG&E's senior unsecured noteholders and will create a statewide wildfire fund of at least $13 billion. The fund will be financed by statewide bonds, PG&E, other California utilities and state funding sources, according to the report.

PG&E will also be recapitalised through contributions worth $8 billion that will allow it to refinance its debtor-in-possession loan and other maturities, according to Bloomberg.

PG&E, Pimco, Elliott and David Kempner did not respond to requests for comment outside regular U.S. business hours.

San Francisco-based PG&E filed for Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires that struck California in recent years, some linked or suspected to be linked to the company's equipment.

The bankruptcy was filed in anticipation of liabilities from the wildfires, including a catastrophic 2018 blaze, the Camp Fire. It killed 86 people in the deadliest and most destructive wildfire in California history.


(Reporting by Kanishka Singh in Bengaluru; Editing by Gopakumar Warrier)