Yahoo Finance PG&E Raises Over $5 Billion in Shares, Equity Unit Offering to Avoid Bankruptcy
PG&E Corporation, an energy-based holding company headquartered in San Francisco, has announced on Friday that it has raised around $5.5 billion from shares and equity unit offering as the company prepares for life to avoid the largest utility bankruptcy in U.S. history in July.
The California power giant said that it sold over 423 million shares at $9.50 to raise nearly $4 billion. The offerings are part of PG&E’s plan to fund its emergence from Chapter 11, subject to market conditions. The offerings are currently expected to close on July 1, 2020, subject to the satisfaction of customary closing conditions, the company said in the statement.
This fund-raising happened days after PG&E Corporation said its Chapter 11 reorganization plan has been confirmed by the United States Bankruptcy Court.
Goldman Sachs & Co. LLC and J.P. Morgan are acting as joint lead book-running managers for both the common stock offering and the equity units offering. Barclays, Citigroup and BofA Securities are also acting as joint book-running managers for both the common stock offering and the equity units offering.
PG&E outlook and price target
Ten analysts forecast the average price in 12 months at $14.61 with a high of $17.00 and a low of $13.00. The average price target represents a 50.15% increase from the last price of $9.73, according to Tipranks. From that 10, six analysts rated ‘Buy’, four rated ‘Hold’ and none rated ‘Sell’.
Morgan Stanley target price is $13 with a high of $21 under a bull scenario and $1 under the worst-case scenario. Earlier this month, Mizuho raised the target price to $14.50 from $13.50, RBC cut target price to $15 from $19 and Wells Fargo raises price target to $13 from $12.
On the other hand, it is good to sell at the current level as 50-day Moving Average and 50-150-day MACD Oscillator signals a selling opportunity.
Analyst comment
“Plan of emergence from Chapter 11 is not yet finalized so we see heightened uncertainty. Very high fire risk,” wrote Stephen Byrd, equity analyst at Morgan Stanley in his June 9 note.
“Our AlphaWise analysis indicated that PCG has >$200b of property value in very high fire-threat areas. Utility-caused wildfires present (a) significant risk to equity value. Highly levered to market multiples since exit financing incorporates significant equity,” he added.
This article was originally posted on FX Empire
