By the OGJ Online Staff
HOUSTON, Mar. 2�PG&E Corp., parent of near bankrupt Pacific Gas & Electric Co., Friday said it closed a $1 billion loan to restructure the company's debt and pay obligations on which it has defaulted.
The obligations that have been paid include $501 million in payments to commercial paper holders, $434 million in borrowings under a revolving credit agreement, and $116 million owed shareholders for the defaulted fourth quarter 2000 dividend.
The move comes just days before a bank forbearance agreement was due to expire.
However, the San Francisco-based energy company said nothing about paying off the millions of dollars its utility subsidiary owes generators for electricity deliveries.
The loans are secured by PG&E's equity interest in its PG&E National Energy Group LLC, PG&E said. The agreement also provides the lenders with options that, depending on certain factors, would allow them to acquire 2-3% of the shares of PG&E National Energy Group.
The 2-year loan agreement, which includes a 1-year extension, prohibits PG&E from declaring or paying future common stock dividends until the loans are repaid.
"The defaults created the risk that the corporation might face a bankruptcy in the near future,'' said Chairman Robert D. Glynn Jr., "and bankruptcy of the corporation would benefit no one.''
Glynn emphasized that the financing would be repaid with PG&E Corp. shareholder dollars only. "Unlike the utility's costs of procuring wholesale electricity for utility customers, this financing is a general corporate obligation of PG&E Corp., and it will be repaid entirely with shareholder dollars,'' he said. "It has no impact on the rates the utility's customers pay now or in the future.''
GE Capital Structured Finance Group, a unit of General Electric Co., served as lender and coarranger, and Lehman Brothers as lender, administrative agent, lead arranger, and book manager on the loan.
