The utility declared bankruptcy a year ago as its finances were crushed under the legal liabilities from fatal Northern California wildfires blamed on its equipment.
“This agreement helps achieve our goals of fairly compensating wildfire victims, protecting customers’ bills and emerging from Chapter 11,” said the company’s CEO and President, Bill Johnson in a statement.
The utility had previously reached settlements with wildfire victims’ groups -- individuals, insurance companies and public entities. The agreements include a settlement valued at approximately $13.5 billion to resolve all remaining wildfire claims. It also reached a $1 billion settlement with cities, counties, and other public entities, and an $11 billion agreement with insurance companies that have already paid insurance coverage related to the 2017 and 2018 wildfires in Northern California.
The deal with bondholders must still be ratified by holders of two-thirds of the principal amount of each class of notes being refinanced by Jan. 28.
Under the plan, new notes will be issued by the utility to satisfy existing high-coupon, long-dated senior notes, senior notes with near-term maturities, and funded bank debt (including revolving loans, term loans, and the pollution control bonds).
All other senior notes will be reinstated. Newly issued notes with lower cost debt will save customers approximately $1 billion, the utility said.