Published: Wed, January 09, 2019
Markets | By Noel Gibbs

California utility assessing finances amid wildfire links | AP business

California utility assessing finances amid wildfire links | AP business

The parent company of California's largest utility said Friday it is assessing its finances and structure in its effort to confront a growing liability threat from wildfires blamed on the company.

PG&E Corp. stock fell 25% in after-hours trading Friday after a report that the company was eyeing bankruptcy filings for some or all of its businesses.

And Daniel Ford of UBS Group AG on Monday raised his 12-month price target for PG&E to US$29 from US$26, based on recent disclosures by the company asserting it is not responsible for the 2017 Tubbs fire, the second-most destructive in state history. And that's compounding financial woes the company was already facing after other fires destroyed parts of wine country a year earlier.

"You can't trust what they say", said Hill, who represents San Bruno, where a PG&E gas pipeline exploded in 2010, killing eight.

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PG&E shares have plunged almost 50% since November 8, when the deadliest and most destructive wildfire in California history broke out.

As of Friday, PG&E was shying away from negotiating so-called debtor-in-possession financing that companies typically line up before a bankruptcy filing to help keep operating while under court protection, one source familiar with the matter said. Safety is and will continue to be our top priority as we work to determine the best path forward for all of our stakeholders.

Filing for bankruptcy would shield PG&E from the liabilities, giving it time to figure out how to handle the claims.

PG&E said it is reviewing structural options to implement necessary changes while meeting customer and operational needs.

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The utility said on Friday it is also looking for new directors for its holding company and its unit Pacific Gas and Electric Co. "Last year, they were able to fool the legislature with the narrative of bankruptcy or bailout, and the legislature gave them a bailout".

The utility has borrowed more than $3 billion under credit lines available to it, a move companies in financial distress will often make to shore up cash. Furthermore, The Public Utilities Commission, Cal Fire, and federal prosecutors are all investigating the company as well.

PG&E also filed for bankruptcy in 2001 during California's energy crisis.

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