PG & E Stock is collected even after it had to suspend dividends.
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PG & E
(PCG) shares went on 3.9% on Wednesday after a federal California judge gave the company easier terms than the investors had previously feared, and according to the company, it was approaching a deal with investors at a new CEO.
Bakhistorien. This sampling is just a thread in the intertwined knot of legal issues that have captured the California tool PG & E. It was filed for bankruptcy in January due to the huge commitments it faced with deadly fire traps that hit California in 2017 and 2018. The company originally estimated it could be on the hook for as much as $ 30 billion.
The last decision was not part of the tool's bankruptcy process. It was in a separate case: a sampling associated with a 2010 gas pipeline explosion that killed eight people.
Last month US District Judge William Alsup found the company in violation of its criminal trial for that matter and threatened to make the Company launch a broad fire fighting plan, including an inspection of the entire grid. The company said the whole plan could have cost as much as $ 150 billion.
What's new. Judge Alsup told the company that it cannot pay shareholder dividends and must use cash to improve its security practices, especially to cut down trees and manage other vegetation that can create fire hazards around their power lines.
The company does not pay dividends right now because it is in bankruptcy law, so the dividend is not a real change for the shareholders.
The decision "allows for a more thought-out emission reduction plan," wrote Citigroup analysts, who see the judge's "thoughtful and balanced approach" as a positive for the stock.
Looking ahead. It comes to a while before PG & E comes out of criminal trial related to that incident in 2010, which gives yet another political risk to the image. The company's five-year trial began in 2017, and judge Alsup still considers adding an extra year. The judge also said he would continue to monitor the company as it implements its fire protection security plan, analysts and news reports said.
There are also reports that PG & E is approaching an agreement on the board and CEO with a group of investors. It will boost the shares if the company goes through with its reported plan to revise the board and hire Bill Johnson, former CEO of the Tennessee Valley Authority, according to Citigroup.
Write to Alexandra Scaggs at Alexandra.Scaggs@barrons.com
