PG&E faces $30 billion in liabilities stemming from wildfires its equipment may have caused and the California-based company filed for bankruptcy in January. The company is now finalizing a deal with three hedge funds who collectively own 10 percent to nominate 10 new members to the board and appoint Bill Johnson, the outgoing CEO of Tennessee Valley Authority, as CEO.
Separately, a U.S. judge ruled Tuesday the company must scrap its dividend payments to shareholders, Reuters reported. Instead, the company needs to allocate the funds towards cutting down trees and other measures to lower the risk of future wildfires.
Why It's Important
The U.S. District Judge William Alsup was quoted as saying PG&E "pumped out" $4.5 billion in dividends to shareholders, NPR reported. At the same time it neglected taking down trees that should have been to reduce the risk of fire.
The judge will continue evaluating a proposal for PG&E to shut down power lines during heavy windy periods. This would prevent tree branches from brushing with power lines that could cause sparking fires but the company says this is not feasible as the lines reach rural areas that serve cities and suburbs.
PG&E's stock closed Tuesday at $17.66 per share. Shares were trading higher by 3.9 percent at $18.35 early Wednesday morning.
Wells Fargo Still Cautious On California Utilities
Citi Upgrades PG&E, Raises Price Target By 200%
Photo credit: Frank Deanrdo, Flickr
See more from Benzinga
- MKM Talks L Brands After Swim Collection Launch
- Facebook CEO Calls For Social Media Regulation
- KeyBanc Explains Why Popeyes Unit Economics Matters
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.