PG&E stock slides on plan to exit bankruptcy, pay wildfire claims
Sept 10 (Reuters) - Shares of PG&E Corp PCG.N fell on Tuesday after the California power producer unveiled a plan to provide $17.9 billion for claims stemming from wildfires as part of its plan to exit bankruptcy.
The plan filed in U.S. Bankruptcy Court in San Francisco includes payments capped at $8.4 billion for wildfire victims, payments capped at $8.5 billion for reimbursing insurers that had paid victims and a $1 billion settlement with local governments.
PG&E said it would finance the plan primarily through the sale of $14 billion of stock, and PG&E said large banks expressed confidence that $30 billion could be raised in both debt and equity to support the plan.
Court documents showed that Knighthead Capital Management was prepared to buy up to $1 billion of the company's stock on behalf of funds it manages. Funds associated with Abrams Capital Partners, Riva Capital Partners and Whitecrest Partners were prepared to invest $500 million combined in PG&E stock, according to court documents.
The company said it planned to pay holders of its loans and bonds in full in cash when the plan, which must be approved by a U.S. bankruptcy judge, went effective, which is expected next year.
Shares of PG&E fell about 4.9% on Tuesday to $10.64 per share.
The stock topped more than $70 per share two years ago. But shares have fallen as the company's equipment was blamed for wildfires in California in 2017 and 2018, including November's Camp Fire, the deadliest and most destructive wildfire of the state's modern history.
Evercore ISI said in a research note on Tuesday it was now estimated the company's total pretax wildfire charges at $21.9 billion, up from its previous estimate of $17.9 billion. Evercore also lowered it price target for the stock to $18.50 from $22.50 per share.
(Reporting by Tom Hals in Wilmington, Delaware Editing by Marguerita Choy)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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