SAN FRANCISCO • PG&E Corp said it will file for bankruptcy in California after the cost of wildfires left it with potential liabilities of US$30 billion (RM123.08 billion) or more, gutting its share price and prompting the departure of its CEO.
The San Francisco-based company said it will file under Chapter 11 of the US bankruptcy code by Jan 29 after giving the required 15-day notice to its employees, according to a filing at the Securities and Exchange Commission yesterday.
On Sunday, the company started searching for a new leader after Geisha Williams (picture), 57, quit as CEO. General counsel John Simon will take the helm in the meantime. The departure of Williams, who took over as CEO in March 2017, follows a catastrophic three months for PG&E.
The company has seen two-thirds of its market value wiped out since November’s Camp Fire — the deadliest wildfire in California’s history. Its debt has been downgraded to junk and state regulators have called for a management shakeup.
Investigators have been probing whether the power giant’s equipment ignited the fire, along with its potential liability for blazes that devastated Northern California’s wine country in 2017 — costs that “could exceed US$30 billion”, according to the filing.
That would dwarf the US$1.5 billion in cash and cash equivalents on hand as of last Friday. The board concluded that a Chapter 11 reorganisation “is ultimately the only viable option to restore PG&E’s financial stability”, according to the filing.
The company’s deepening financial crisis has forced California regulators and policymakers to consider a bailout package and PG&E.
The utility said bankruptcy was the best way forward for employees and those who are claiming losses from wildfires that may have been caused by its power lines.
A notice may signal that the company has accelerated plans to make a Chapter 11 filing as way of dealing with crippling liabilities from the wildfires of 2017 and 2018 that killed more than 100 people and destroyed hundreds of thousands of acres. It also puts pressure on California’s new governor Gavin Newsom and legislators to come up with a plan that could keep the utility solvent. — Bloomberg