Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on January 29, 2019, 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 January 31, 2020, the
Debtors, certain funds and accounts managed or advised by Abrams Capital Management, L.P. (“Abrams”), and certain funds and accounts managed or advised by Knighthead Capital Management, LLC (“Knighthead” and, together with Abrams, the “Shareholder
Proponents”) filed the Debtors’ and Shareholder Proponents’ Joint Chapter 11 Plan of Reorganization dated January 31, 2020 with the Bankruptcy Court (as may be amended, modified or supplemented from time to time, the “Proposed Plan”).
Equity Backstop Commitment Letters
As previously disclosed, 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. Capitalized terms used but
not defined herein have the meanings given in the Backstop Commitment Letters.
On March 1, 2020, the Debtors entered into Amended and Restated Backstop Commitment Letters (the “Amended and Restated Backstop
Commitment Letters”) with the Shareholder Proponents, pursuant to which they have agreed to modify certain terms of the Backstop Commitment Letters to which they are a party. These modifications include, among others:
In addition, the Amended and Restated Backstop Commitment Letters modify certain termination rights and adjust the circumstances under
which the Backstop Commitment Premium is subject to clawback.
The foregoing description of the Amended and Restated Backstop Commitment Letters does not purport to be complete and is qualified in its
entirety by reference to the Amended and Restated Backstop Commitment Letters. The form of the Amended and Restated Backstop Commitment Letter is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Except as described above with respect to the Amended and Restated Backstop Commitment Letters with the Shareholder Proponents, the
Backstop Commitment Letters of all other Backstop Parties have not been modified. Without any further amendment, as of February 29, 2020, the Backstop Parties under the remaining Backstop Commitment Letters have the right to terminate their
Backstop Commitment Letters because approval of the Bankruptcy Court was not obtained by February 28, 2020. The Corporation intends to seek amendments to the other Backstop Commitment Letters, or obtain replacement Backstop Commitments, in each
case consistent with the terms and conditions of the Amended and Restated Backstop Commitment Letters, such that the Aggregate Backstop Commitments remain at $12.0 billion.
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 up to $10.825 billion in bridge financing for the Proposed Plan.
On February 28, 2020, the Debt Commitment Letters were amended to extend the deadline for obtaining Bankruptcy Court approval of the Debt
Commitment Letters from February 28, 2020 to March 31, 2020.