PG&E shares increased significantly Monday after Bloomberg reported an investor group offered the natural gas and electric service company a $4 billion alternative plan to assist in avoid bankruptcy due to the fires that took place in California.
In addition, Bloomberg reported that activist hedge fund Elliott Management is part of the group, meanwhile the plan includes convertible debt, as StreetAccount reports. PG&E announces earlier this month that it plans to file for Chapter 11 bankruptcy protection.
The company and BlueMountain declined to comment, while Hedge fund The Baupost Group did not respond to CNBC’s request for comment. Both companies had a stake in PG&E at the end of the third quarter, the latest available, according to government documents.
PG&E shares rose on Thursday after California investigators cleared the utility company of liability in the October 2017 Tubbs Fire, saying a private electrical system was responsible. Whether PG&E will be found responsible for November’s Camp Fire is still unknown. That particular fire killed at least 86 people, destroying roughly 14,000 homes.
The California utility said in a court filing Wednesday that it can’t afford a federal judge’s order to inspect its energy grid and clear trees that could fall into its power lines as it is estimated to cost between $75 billion and $150 billion.
“PG&E would inevitably need to turn to California ratepayers for funding, resulting in a substantial increase — an estimated one-year increase of more than five times current rates in typical utility bills,” it said in the filing.
