The Pacific Gas & Electric logo is displayed on a sign in front of the PG&E Service Center on Jan. 15, 2019 in San Rafael, Calif.Justin Sullivan/Getty Images
U.S. power producer PG&E Corp’s shares surged as much as 16 percent on Tuesday after it said it had secured $5.5 billion in debtor-in-possession (DIP) financing from four banks as it prepares to file for Chapter 11 bankruptcy protection.
The financing will comprise a $3.5 billion revolving credit facility, a $1.5 billion term loan and a $500 million delayed-draw term loan.
Investment banks JPMorgan Chase & Co, Bank of America Merrill Lynch, Barclays Plc and Citigroup Inc will provide financing, the company said in a filing.
It expects to file for bankruptcy on or about Jan. 29.
Separately on Tuesday, PG&E shareholder BlueMountain Capital Management LLC urged the power producer to delay its plans to file for bankruptcy.
The asset manager, which owns about 11 million shares in PG&E, or about 2.1 per cent of the company, had said last week filing for bankruptcy protection was unnecessary.
PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, faces widespread litigation, government investigations and liabilities that could potentially exceed $30 billion because of wildfires in the state.
Its shares were last up about 9 per cent on Tuesday afternoon.