PG&E turns down San Francisco’s $2.5 billion offer to buy assets

PG&E turns down San Francisco’s $2.5 billion offer to buy assets

FILE PHOTO: A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

(Reuters) – PG&E Corp (PCG.N) rejected a $2.5 billion offer from San Francisco to buy the bankrupt Californian company’s power lines and other infrastructure within the city, citing the offer was inadequate.

San Francisco’s offer significantly undervalued its assets and a deal wouldn’t be in the best interest of its customers, PG&E Chief Executive Officer Bill Johnson wrote in a letter, dated October 7, to San Francisco Mayor London Breed.

The company’s financing strategy to emerge from bankruptcy did not include selling off company assets, Johnson said in the letter.

“Although we cannot accept your offer, we want to clearly communicate that PG&E intends to continue working with the City to best serve the citizens and businesses of San Francisco.”

In early September, eight months after the utility sought Chapter 11 bankruptcy protection, San Francisco offered to buy PG&E’s assets serving the city.

Reporting by Shanti S Nair in Bengaluru; Editing by Shinjini Ganguli

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