PG&E Corporation Announces $3.25 Billion Common Stock Investment from Multiple Investors

PG&E Corporation today announced that it has entered into a definitive agreement (the “Investment Agreement”) with a select number of investors, including affiliates of Appaloosa, Third Point LLC, Zimmer Partners and Fidelity Management & Research Company, LLC, that have agreed to purchase an aggregate of $3.25 billion in common stock of PG&E, expected to be issued in a private placement upon PG&E’s emergence from Chapter 11.

The transaction is expected to close on the effective date of PG&E’s emergence from Chapter 11. The investors will pay up to $10.50 per share, depending on the price per share to be paid in an expected public offering of common stock, as provided in the Investment Agreement for such purchase. The proceeds from the private placement will be used to fund a portion of PG&E’s exit financing. Shares purchased in the private placement will be subject to a 90-day lock-up, subject to certain exceptions. The investors may terminate the Investment Agreement if the equity backstop commitments, which PG&E previously received from the equity backstop parties, are drawn or if PG&E does not emerge from Chapter 11 within 45 days.

Lazard acted as financial advisor, Cravath, Swaine & Moore LLP acted as legal advisor and Goldman Sachs & Co. LLC and J.P. Morgan acted as placement agents for the company.

Amendment to Equity Backstop Commitment Letters

PG&E Corporation also announced that it has received the consents needed to amend the equity backstop commitment letters to eliminate the previously existing tier structure that required the company to meet minimum prices to execute either a fully marketed or rights offering. Under the terms of the amendment, the company may pursue any kind of marketed equity capital raise, as long as the price per share in the transaction exceeds the “Backstop Price” provided in the equity backstop commitment letters. In addition, as part of the amendment, the parties to the backstop commitment letters have committed to enter into a Redeemable Forward Stock Purchase Agreement (“RFSPA”) for $523 million.

“Today’s announcement is another positive step toward PG&E’s emergence from Chapter 11, ensuring wildfire victims are paid more quickly and positioning the company for a sustainable financial future,” said PG&E Executive Vice President and Chief Financial Officer, Jason Wells. “The amended backstop agreement simplifies our exit financing, while maintaining important protections should the market experience substantial volatility. These agreements also are a clear signal of confidence in PG&E’s future.”

Reduced Size of Future Capital Raise; Increased Flexibility

By entering into the private placement and the RFSPA, PG&E has prearranged for almost $3.8 billion of the $9.0 billion of equity required for emergence. Combined with the amendment to the equity backstop commitment letters, PG&E has meaningfully reduced the amount of equity required to be raised for emergence and has meaningfully increased its flexibility as it considers alternatives to raise the remaining amount.

About PG&E Corporation

PG&E Corporation is a holding company headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company (the “Utility”), an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. Each of PG&E Corporation and the Utility is a separate entity, with distinct creditors and claimants, and is subject to separate laws, rules and regulations.

Non-Solicitation

This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

Forward-Looking Statements

This press release contains forward-looking statements that are not historical facts, including statements about the private placement and the company’s expected emergence from Chapter 11. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. There can be no assurance that the expected offerings will be consummated on the terms described in this press release, or at all. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and the Utility’s Annual Report on Form 10-K for the year ended December 31, 2019, their Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and their subsequent reports filed with the SEC, which are available on the SEC website at www.sec.gov. Additional factors include, but are not limited to, those associated with the Chapter 11 cases of PG&E Corporation and the Utility that commenced on January 29, 2019. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.

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