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

Reuters 

By and Mike Spector

(Reuters) - PG&E Corp, the biggest U.S. power utility, said on Monday it is preparing to file for 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 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 law.

PG&E said on Sunday its was leaving and being replaced by on an interim basis.

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

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

PG&E expects the process will "support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern 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 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 to make operational changes. It said on Jan. 3 it was reviewing its structural options and looking for new directors with safety experience.

said "a reorganization for both the utility and 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 in northern and 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.

Weil, LLP and Cravath, LLP are its legal advisers while is its and is its

(Reporting by and in New York; Additional reporting by in and in Bengaluru; Editing by and Jeffrey Benkoe)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 14 2019. 18:27 IST
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