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Bloomberg
PG&E Corp shares plummeted after California Governor Gavin Newsom rejected its bankruptcy restructuring plan, forcing the company to make sweeping changes to meet his demands.
The state’s largest power company has until Tuesday to address conditions that Newsom laid out in a letter late last week rejecting its reorganisation proposal. The governor said the current plan falls “woefully short†of meeting requirements of a key state law and insisted on changes that could reshape PG&E, including an entirely new board and the option for a takeover.
The company’s shares fell as much as 23% in New York. Its most actively traded bonds rose as Newsom’s move bolsters a rival reorganisation plan
proposed by a group of bondholders.
The rebuke upends PG&E’s restructuring just as the path towards a smooth exit seemed to be clearing.