Shares of embattled California utility PG&E (PCG) - Get Pacific Gas & Electric Co. Report surged in premarket trading on Wednesday after the company won court approval for two multi-billion-dollar wildfire settlements that allow it to move forward with its restructuring plan to exit bankruptcy.
Shares of PG&E jumped as much as 18% after the San Francisco company late Tuesday received court sign-off on its $13.5 billion restructuring plan to compensate victims of catastrophic fires blamed on its equipment, and an $11 billion deal to settle claims with insurers and investors.
The agreements are key to the utility company's efforts to emerge from the biggest utility bankruptcy in U.S. history by a state-imposed deadline of June 30.
Judge Dennis Montali’s approval came less than a week after California Gov. Gavin Newsom rejected PG&E’s restructuring plan, saying it didn’t comply with state law. His disapproval had threatened to derail the utility’s settlement with wildfire victims, but the the deal was salvaged by stripping out a clause requiring the governor’s approval.
The company said it was still negotiating with Newsom’s office to ensure the resolution meets the governor’s and state’s approval.
PG&E filed for Chapter 11 in January after its power lines were tied to deadly blazes that erupted across Northern California in 2017 and 2018, leading to an estimated $30 billion in liabilities.
The company separately reached a $1.7 billion agreement with California utility regulators to settle violations tied to the catastrophic blazes that its equipment sparked in 2017 and 2018 - including the Camp Fire, the deadliest in state history.
Shares of PG&E were up a little more than 9% at $11.86 in morning trading on Wednesday.