(Adds governor's proposal for compensation fund)
By Jim Christie
SAN FRANCISCO, June 25 (Reuters) - A committee of bondholders of PG&E Corp's utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion to help the California power provider emerge from Chapter 11 and pay off its liability from wildfires.
In a filing with the U.S. bankruptcy court in San Francisco, the committee, made up of senior unsecured noteholders of Pacific Gas & Electric Co, also sought to terminate the utility's exclusive period for filing a Chapter 11 reorganization plan so the committee may file its own plan. PG&E has until Sept. 29 to file a plan.
PG&E has been too slow to file its own plan and "the need to exit bankruptcy expeditiously is paramount," the committee said in its filing, adding its plan would provide up to $16 billion to compensate all of PG&E's pre-bankruptcy wildfire claims.
The committee's plan would be funded by $18 billion in cash from bondholders in exchange for new common shares in a reorganized company, as well as $2.2 billion in insurance proceeds owed PG&E for wildfire losses.
Bondholders would also provide $4 billion in cash in exchange for new unsecured notes and $5.5 billion would be raised by selling new secured notes to third-party investors.
San Francisco-based PG&E sought Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires in Northern California in 2017 and 2018 that left the company anticipating $30 billion in liabilities blamed on its equipment.
The worst of the blazes, November's Camp Fire, leveled the town of Paradise and killed more than 80 people. It was the deadliest and most destructive wildfire of modern times in California.
A spokesman said the committee had no additional comment on the plan beyond its filing.
A spokesman for PG&E in an email to Reuters said the power provider is "committed to working together with our stakeholders through the Chapter 11 process to fairly and expeditiously resolve our liabilities resulting from the 2017 and 2018 Northern California wildfires, develop a more sustainable business model and continue delivering safe and reliable service."
The committee said in its filing that its reorganization plan will provide a "substantial" capital investment to fund improvements in PG&E's electric infrastructure to ensure reliable power service and meet California's renewable energy goals.
The committee also said its plan will provide for a quick exit from bankruptcy for PG&E that maintains an investment-grade rating for the power provider.
The committee's filing did not identify unsecured noteholders that would participate in the plan, but the largest stakeholders in the group include Pacific Investment Management Co LLC, Elliott Management Corp and Davidson Kempner Capital Management.
According to the committee's filing, terms of the plan will not affect PG&E's ratepayers and will provide for a $4 billion contribution to a fund for insuring against utility-related wildfire liabilities that California officials are considering establishing.
Governor Gavin Newsom last week proposed helping utilities create a fund of up to $21 billion to compensate future victims of wildfires sparked by the companies' equipment or employees.
Approval from state lawmakers would be needed to create the fund. (Reporting by Jonathan Stempel in New York and Jim Christie in San Francisco Editing by Matthew Lewis and Steve Orlofsky)