FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

(Reuters) - PG&E Corp PCG.N shareholders are proposing raising $15 billion in equity to fund a planned reorganization of the power producer facing huge liabilities from California wildfires, according to a company filing on Thursday.

The proposed fundraising, a rights offering of selling new shares, is the latest effort to rescue PG&E, which sought Chapter 11 bankruptcy protection earlier this year after severe wildfires in 2017 and 2018 resulted in more than $30 billion in liabilities.

The California utility currently has the sole right to put forward a reorganization plan, although other investors have asked a judge to allow them to do so as well.

Hedge funds Knighthead Capital Management and Abrams Capital Management, the shareholders that made the proposal in a letter to PG&E, pledged to purchase a portion of the offered equity if shares are left unsold through a so-called backstop commitment, the filing showed.

“PG&E is currently working its way through a complicated restructuring process. As a result of significant wildfire liabilities and related capital obligations, the company faces a material need for new funding,” the two hedge funds said in the filing. Together they own about 7.3% of PG&E, according to Refinitiv data.

In May, state fire investigators determined that PG&E transmission lines caused the deadliest and most destructive wildfire on record in California, a blaze that killed 85 people last year.

Nearly 19,000 homes and other structures were destroyed. The death toll stands as the greatest loss of life from a single wildfire in California history.

The proposed term sheet for the backstop commitment plan “contemplates that all subrogation claims and wildfire claims shall not exceed $16 billion in the aggregate,” according to the filing.