Markets

PG&E shares plunge on bankruptcy worries

PG&E shares plunge on bankruptcy worries

California's largest utility company is exploring bankruptcy protection amid concerns that its equipment could have caused one of the state's deadly wildfires previous year. Two analysts called the idea an "exploitive" tactic that won't help PG&E's profile.

For its part, PG&E released a statement to NPR in which it said that the company "does not comment on market rumors or speculation".

The fires near the Northern California mountain community of Paradise swept through the town, killing at least 86 people in the deadliest and most destructive wildfire in the state's history.

The California wildfires that scorched millions of acres across the Golden State in late 2018 caused widespread devastation, with loss of human life and property damage just some of the ways that the fires touched the lives of thousands of Californians.

The company has considered seeking financial shelter in bankruptcy court because of the potential liabilities, Reuters reported, citing anonymous sources.

Some analysts said the stock reaction may be overblown.

"We expect that negative public sentiment and the increased political pressure will challenge the regulators' willingness and ability to implement measures to protect credit quality over the near term", S&P said. "Bankruptcy has been on the table for many months, if not years".




The California Public Utilities Commission last month opened proceedings to consider penalties against the company for falsifying pipeline safety records. That said, it has yet to determine a specific cause for the wildfire.

PG&E "could face a liquidity crisis by mid-to-late '19", Greg Gordon, an analyst at Evercore ISI, said in a research note Monday. The shares were down 22 per cent to US$19.04 at 2:28 p.m.

The utility, California's largest, is contending with potentially crippling liability costs related to California's Camp Fire. It would extend legislation that allows PG&E to issue bonds to pay off the costs tied to the 2017 blazes.

Allstate Insurance, State Farm, and USAA have each filed lawsuits against Pacific Gas and Electric (PG&E).

The utility could be faced with billions of dollars of liabilities from fatal blazes in 2018 and 2017. The company could be engaged in similar brinkmanship now, he said. "You can't trust what they say". "Last year, they were able to fool the legislature with the narrative of bankruptcy or bailout, and the legislature gave them a bailout". The filing isn't certain, the people said, but it may be enough to force the hand of state legislators who could come up with a rescue package.

The company said on Friday that it was reviewing its "structural options" and assessing its operations, finances, management, structure and governance. "We recognize the need to balance the interests of many stakeholders while maintaining safe, reliable and affordable services for our customers, which is always our top priority", the company said in a statement.

PG&E filed for bankruptcy once before in 2001.


  • A Special Peek at Marvel Studios’ ‘Captain Marvel’

    A Special Peek at Marvel Studios’ ‘Captain Marvel’

    Set in the 1990s, the events of this film will tie into the Avengers sequel set to be released in May this year. That said, I will admit that the young Fury de-aging is the best yet - it's nearly entirely unnoticeable.
    Women of French yellow vest group counter violent image

    Women of French yellow vest group counter violent image

    They have been concentrated on Saturdays, after first erupting on November 17 following a campaign spread on social media. On Wednesday, a key figure in the yellow vests movement was arrested for allegedly organising an illegal demonstration.
    USS Cole bomber Jamal al-Badawi targeted in Yemen air strike

    USS Cole bomber Jamal al-Badawi targeted in Yemen air strike

    The ship was refueling at the port of Aden in Yemen when suicide bombers attacked in a small boat filled with explosives. He was recaptured in March 2004 and sentenced to death, but almost two years later he managed to escape a second time.
  • Kelly 'Surviving Lies' Page Launches, Facebook Deletes It

    Kelly 'Surviving Lies' Page Launches, Facebook Deletes It

    The program follows the sexual assault allegations against Kelly, including interviews with Kelly's ex-wife and his accusers. Rolling Stone originally reported that Chance said, "I didn't value the accusers' stories because they were black women".
    Canadian teenager Bianca Andreescu reaches her first WTA final at ASB Classic

    Canadian teenager Bianca Andreescu reaches her first WTA final at ASB Classic

    After holding serve in the first game, she set the tone for the first set by immediately breaking Goerges for a 2-0 lead. Goerges sensed the opportunity, and converted her second set point to level the match.
    Kliff Kingsbury To Interview With Cardinals, Jets

    Kliff Kingsbury To Interview With Cardinals, Jets

    It was suggested Kingsbury could interview still but to do so would require him to resign from his job as offensive coordinator. Kingsbury is meeting with the New York Jets about their head coaching vacancy, according to Bruce Feldman of FOX Sports.
  • World Bank President Jim Yong Kim Resigns Before End of Term

    World Bank President Jim Yong Kim Resigns Before End of Term

    Kim was previously president of Dartmouth College and head of the HIV/AIDS department at the World Health Organisation. Its sister lending agency, the International Monetary Fund, has always been headed by a European.
    Chrissy Metz Denies Making Alison Brie Slur on Globes Red Carpet

    Chrissy Metz Denies Making Alison Brie Slur on Globes Red Carpet

    It's not clear whether Metz meant the slur jokingly or not. "I would never say anything like that about anyone". Brie, who arrived with husband Dave Franco , appeared not to have heard what Metz said. "'I know her.
    Samsung unveils massive 219-inch 4K

    Samsung unveils massive 219-inch 4K "The Wall" TV

    With this, the user can take advantage to expand any size they desire, even at an irregular 9x3, 1x7 or 5x1 screen sizes. This provides for an impressive, infinity pool effect which enables the display to blend into any living environment.
  • Man attacks 20 school children in China

    Man attacks 20 school children in China

    A male suspect was brought "under control" and the wounded pupils were admitted to hospital, the Xicheng district government said. In October, a 39-year-old woman stormed a kindergarten in Chongqing, southwest China, injuring 14 kids with a kitchen knife.
    China's Chang'e-4 spacecraft lands on far side of the moon

    China's Chang'e-4 spacecraft lands on far side of the moon

    Photos of the rover leaving "humankind's first tracks" were sent back to Earth by the lander after the rover separated from it. It has a maximum speed of 200 metres per hour and can climb a 20-degree hill or an obstacle up to 20cm tall.
    Conor McGregor and Dee Devlin have welcomed their second child

    Conor McGregor and Dee Devlin have welcomed their second child

    Earlier this week, MMA superstar Conor McGregor welcomed his second child into the world with longtime partner Dee Devlin . The UFC's former featherweight and lightweight champ recently announced the news via the Instagram post below.