PCG stock is moving sharply higher after PG&E Corporation (NYSE:PCG) settled its dispute with bondholders Pimco and Elliott Management over its reorganization.

Major Relief

When a company manages to settle its issues with bondholders, then it is, without a doubt, a major development, and that is what PG&E Corporation managed to do today. Late Wednesday, the company announced that it managed to settle its long-term dispute with its key bondholders Elliot Management and Pimco, among others.

The company is emerging from bankruptcy, and the settlement with its bondholders was one of the biggest obstacles to that. This is a major development for the company since it can now start working toward a strong business once again.

More importantly, this development means that the exit plan that had been mooted by PG&E management is still on the table. After reaching this settlement, the business reorganization plan that had been proposed by the group of bondholders is also going to be withdrawn.

PCG stock is trading up by 8.13% at $13.57.

 That being said, it is important to keep in mind that the consortium of bondholders also holds the lion’s share of the company’s unsecured notes. However, PG&E still isn’t completely out of the woods with regard to the whole situation.

The company still needs the backing of the Governor of California with regards to the exit plan that it has proposed. However, Governor Newsom has already given a statement in which he maintained his stance about his opposition to the aforementioned plan. He went on to state the PG&E has not addressed the concerns that he had raised with the company back in December.

>> NFLX Stock Drops as Rivals Take Bite of US Market Share

In this regard, it is necessary to point out that Newsom had earlier stated that the state of California could take over the company. Yesterday, he reiterated that the takeover option is still open. Despite these comments from the Governor, the market seemed rather optimistic about the immediate prospects of PG&E.

PCG stock has soared 33% over the past two weeks.

Featured image: DepositPhotos © minervastock