Home>Business>Top U.S. utility PG&E says it is preparing bankruptcy filing By Reuters
Business

Top U.S. utility PG&E says it is preparing bankruptcy filing By Reuters


© Reuters. FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise

By Liana B. Baker and Mike Spector

(Reuters) – PG&E Corp (N:), the biggest U.S. power utility, said on Monday it is preparing to file for Chapter 11 bankruptcy for all of its businesses as it faces potentially crushing liabilities linked to catastrophic wildfires in 2017 and 2018.

The company’s shares tumbled 55 percent in early trading.

PG&E faces widespread litigation, government investigations and liabilities that could potentially reach $30 billion, according to the company, accounting for damage from fires last year and in 2017.

PG&E, the biggest power company in the United States with customers, said it planned to file for bankruptcy protection around Jan. 29, and was giving employees a 15-day notice to employees to comply with California law.

PG&E said on Sunday its chief executive officer was leaving and being replaced by General Counsel John Simon on an interim basis.

The utility holding company said it did not see any impact to electric or services for its customers as a result of a bankruptcy.

PG&E is reeling from the November Camp fire that swept through the California mountain community of Paradise and killed at least 86 people in the deadliest and most destructive blaze in state history.

PG&E expects the Chapter 11 process will “support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires.”

PG&E said it is in discussions with lenders about receiving

roughly $5.5 billion in debtor-in-possession financing to help it operate while navigating through bankruptcy. It has access to about $1.5 billion in existing cash.

The company’s board decided to oust CEO Geisha Williams (NYSE:) and undergo a restructuring at a board meeting this weekend in San Francisco, according to a source familiar with the matter.

Advisers said they expect it may take up to two years for the company to emerge from bankruptcy.

The company has been under pressure from the California Public Utilities Commission to make operational changes. It said on Jan. 3 it was reviewing its structural options and looking for new directors with safety experience.

Board Chairman Richard Kelly said “a Chapter 11 reorganization for both the utility and PG&E Corporation represents the only viable option to address the company’s responsibilities to its stakeholders.”

PG&E serves 5.4 million electric customers and 4.3 million natural gas customers in northern and central California.By filing for bankruptcy, the company will be able to work with “wildfire victims, customers, employees, creditors, shareholders, the financial community and business partners,” in one court-supervised process, it said.

Law firms Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are its legal advisers while Lazard is its financial adviser and AlixPartners LLP is its restructuring adviser.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Review Overview

Summary

Leave a Reply

Your email address will not be published. Required fields are marked *