PG&E May Need to Sell More Stock to Reorganize After Rout (1)

PG&E Corp. may need to issue more equity to finance its reorganization plan after a broad sell-off of utility shares.

Hedge funds and other investors pledging to purchase shares for a $9 billion raise backing the company’s reorganization are entitled to buy at a lower price if the S&P 500 Utilities Index declines after Nov. 1, 2019.

As of Thursday, the index had fallen 13% since that date, which would allow those investors to buy shares at 8.7 times price to earnings, rather than 10 times, Andrew DeVries, an analyst at Credit Sights, wrote in a research note.

“There is ...