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How We View PG&E Amid Bankruptcy

By the end of the year, we expect a decision out of the bankruptcy court on the Northern California utility.


Travis Miller: The Northern California utility PG&E has been on a roller-coaster ride for much of the year. The recent wildfires bring it back into the news, even while it goes through bankruptcy proceedings.

Right now, we have two competing factions in the bankruptcy case. Even if the current wildfires result in no significant liabilities, it still faces substantial liabilities, as much as $30 billion worth, from 2018 and 2017 fires. So right now, you've got two fighting factions. Some bondholders have put forward a plan that would essentially wipe out current shareholders but protect their investment in the bonds. PG&E has put forward an exit plan that would give shareholders about half of the company in the best case and as little as 20% of the company in a worst case. A lot of this will depend on the market share price for PG&E and the sentiment around the future of wildfire policy in California.

Travis Miller does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.