Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on January 29, 2019 (the “Petition Date”), PG&E Corporation (the “Corporation”) and its subsidiary, Pacific
Gas and Electric Company (the “Utility,” and together with the Corporation, the “Debtors”), filed voluntary petitions for relief under chapter 11 of title 11 (“Chapter 11”) of the United States Code in the U.S. Bankruptcy Court for the Northern
District of California (the “Bankruptcy Court”). The Debtors’ Chapter 11 cases are being jointly administered under the caption In re: PG&E Corporation and Pacific Gas and Electric Company, Case No. 19-30088 (DM) (the “Chapter 11 Cases”). On
December 12, 2019, the Debtors filed a Joint Chapter 11 Plan of Reorganization dated December 12, 2019 (the “Proposed Plan”).
Joinder Agreements to the Noteholder Restructuring Support Agreement
Also as previously disclosed, on January 22, 2020, the Debtors entered into a Restructuring Support Agreement (the “RSA”) with certain
holders of senior unsecured debt of the Utility (the “Consenting Noteholders”) and certain funds and accounts managed or advised by Abrams Capital Management, L.P. and certain funds and accounts managed or advised by Knighthead Capital Management,
LLC.
As of January 31, 2020, the Debtors have entered into Joinder Agreements with additional holders of senior unsecured debt of the Utility
(each, a “Joining Party”) under which each Joining Party agrees to join and be bound by the terms of the RSA. Collectively, the Joining Parties and the Consenting Noteholders represent more than 66.7% in principal amount of the following classes of
debt of the Utility: (i) senior notes that mature through 2022 and (ii) senior notes that mature from 2034 through 2043 and have an intterest rate above 5.0% per annum. The Form of Joinder Agreement is filed as Exhibit 10.1 hereto and incorporated
herein by reference. As of January 31, 2020, the Joinder Parties are entities affiliated with:
Consents to the Backstop Commitment Letters
Also as previously disclosed, on December 23, 2019, the Corporation entered into Chapter 11 Plan Backstop Commitment Letters (the
“Backstop Commitment Letters”) with certain investors (the “Backstop Parties”), under which such investors severally committed to fund up to $12.0 billion of proceeds to finance the Proposed Plan through the purchase of common stock of the
Corporation.
On January 27, 2020, holders of substantially all of the previously disclosed Backstop Commitments consented and agreed to (a) the
Debtors filing with the Bankruptcy Court an amended and restated Joint Chapter 11 Plan of Reorganization that implements the terms and conditions of the RSA and (b) an extension of the deadline for the Bankruptcy Court to enter an order approving the
Backstop Commitment Letters from January 31, 2020 to February 28, 2020.
Amendment of Debt Commitment Letters
As previously disclosed, the Debtors entered into debt commitment letters (the “Debt Commitment Letters”) with certain lenders (the
“Commitment Parties”), pursuant to which the Commitment Parties committed to provide $34.35 billion in bridge financing for the Proposed Plan. Also as previously disclosed, the Debt Commitment Letters were amended for the first time on November 18,
2019 to extend the deadline for obtaining Bankruptcy Court approval of the Debt Commitment Letters and for the second time on December 20, 2019 to, among other things, (a) extend the deadline for obtaining Bankruptcy Court approval of the Debt
Commitment Letters from December 20, 2019 to January 31, 2020 and (b) conform to changes in the Backstop Commitment Letters.
On January 30, the Debt Commitment Letters were amended to, among other things, (a) extend the deadline for obtaining Bankruptcy Court
approval of the Debt Commitment Letters from January 31, 2020 to February 28, 2020, (b) reduce the aggregate commitments provided by the Commitment Parties from $27.35 billion to $5.825 billion for the Utility and from $7 billion to $5 billion for
the Corporation to take into account reinstated debt under the RSA and (c) include termination events for modifications to the RSA, failure to obtain approval by the Bankruptcy Court to enter into the RSA and failure to obtain the necessary consents
from the Backstop Parties to permit the amendment and restatement of the Joint Chapter 11 Plan of Reorganization that implements the terms and conditions of the RSA (the “Amendment No. 3 to Debt Commitment Letters”).
The foregoing description of the Amendment No. 3 to Debt Commitment Letters does not purport to be complete and is qualified in its
entirety by reference to the Amendment No. 3 to Debt Commitment Letters, which are filed as Exhibits 10.2 and 10.3 hereto and incorporated herein by reference.