Published: Wed, January 09, 2019
Business | By Eloise Houston

PG&E is tanking after report says it's considering filing for bankruptcy protection

PG&E is tanking after report says it's considering filing for bankruptcy protection

Shares of San Francisco-based PG&E lost $5.45, or 22.3 percent, to close Monday at $18.95, the latest severe sell-off for the company since November and the outbreak of the state's deadliest recorded wildfires.

A bankruptcy filing reportedly is not PG&E's preference for addressing the liabilities, but the preparations could put pressure on California politicians hoping the company can avoid such an outcome.

State Senator Jerry Hill, an outspoken PG&E critic, said the utility previously raised the possibility of a bankruptcy filing as leverage when seeking state assistance in paying its wildfire liabilities.

Similarly, State Farm said that PG&E was "failing to keep the power lines, wires, and any and all associated equipment in a safe condition at all times to prevent fires". Lawmakers were in talks late a year ago for legislation to protect the company from liabilities related to the 2018 fires.

- S&P slashed PG&E's credit rating to junk status as the utility grapples with the political and financial fallout from costly and deadly wildfires in California.

"Rather than waiting for the regulators to tell you what's going to happen - which could take years", he said, "you're in the bankruptcy court where there's a structure".

Shares of PG&E, which has a market capitalization of $12.7 billion, dropped 30 percent in after hours trading in NY on Friday on the news. Safety is and will continue to be our top priority as we work to determine the best path forward for all of our stakeholders. One option under consideration: Selling its natural gas business after a bankruptcy filing, the people familiar with the matter said. But the bill did not cover 2018 fires.

The company said on Friday that it was reviewing its "structural options" and assessing its operations, finances, management, structure and governance.

The utility said on Friday it is also looking for new directors for its holding company and its unit Pacific Gas and Electric Co. The California Public Utilities Commission is considering breaking up the company as part of an investigation into PG&E's safety culture. It had amassed too much debt by buying electricity, which it was then not allowed to recoup by increasing rates for its customers.

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