Published: Tue, January 08, 2019
Markets | By Otis Pena

California utility assessing finances amid wildfire links | AP business

California utility assessing finances amid wildfire links | AP business

A bankruptcy filing is not PG&E's preference for addressing liabilities from the catastrophic blazes, some of the sources said.

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.

It said its board of directors is engaging outside experts for advice on wildfire safety, but it did not identify any potential plans to address liability or safety.

To recoup losses resulting from the Camp Fire - California's most destructive wildfire to date - three insurance companies are suing the energy company allegedly liable for the fire, for billions of dollars.

PG&E also faces dozens of lawsuits from owners of homes and businesses that burned during 2017 fires.

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State investigators have not yet determined whether PG&E... California policymakers had approved a bill that let utilities pass on to customers some costs related to wildfires, according to Moody's.

The ratings agency said the downgrade reflects PG&E's recent announcement that its board was reviewing the company's management, finances, governance and structural options.

PG&E, whose shares have lost almost half of their value since the wildfire, said it is working with a leading search firm to identify new directors and is interviewing several candidates. Lawmakers were in talks late a year ago for legislation to protect the company from liabilities related to the 2018 fires.

PG&E could wait to see how things play out in California, or it could opt for a bankruptcy proceeding that would prove more predictable and free the company from the mercy of state policy makers, Bloomberg Intelligence analyst Kit Konolige said. The utility's total market value is now below $15 billion, and PG&E has just $3.5 billion in cash after borrowing from an existing revolving credit line. 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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