Shares of California utility PG&E Corp (PCG) - Get PG&E Corporation Report jumped Wednesday on a report the company is finalizing terms for a $13.5 billion settlement for the victims of the wildfires tied to its equipment failures that spread across the state in 2017 and 2018.
Half of the settlement will be paid in cash with the other half of its to be paid in stock in a reorganized post-bankruptcy company, Bloomberg reported, citing sources close to the situation.
The cash portion of the settlement would be paid up front in a lump sum, with the remainder being paid over the next 18 months. While no final agreement has been reached, reportedly, the structure of the deal is being ironed out.
The company first proposed the $13.5 billion settlement in November. The company has already agreed to pay insurers $11 billion and also has a deal to pay local government agencies another $1 billion.
The company filed for protection in January under the weight of $30 billion in liabilities tied to the fatal wildfires. PG&E’s case is the largest utility bankruptcy in U.S. history.
PG&E had initially offered victims $8.4 billion, which was rejected.
California Governor Gavin Newsom went as far as to propose a state takeover of the utility if it failed to reach a settlement with insurers and victims in a timely manner.
PG&E shares rose as much as 26% before trimming their gains. In recent action the stock was up $1.10, or 13%, to $10.23.