After facing monumental liabilities from last year’s wildfires, utility giant PG&E is working with investment banks to negotiate debtor and possession loans. Pacific Gas & Electric is facing billions of dollars in claims as a result of the 2018 campfire that ended in massive damages to property and 86 deaths. Over 14,000 homes were destroyed, along with hundreds of local businesses and over 4300 other buildings. The company reports a minimum of $7 billion in claims against them, and that they will use the bankruptcy process to pay some of their debts and damages, while staying in business to provide gas and electric services.
The 2018 fire is believed to have been started by a PG&E power line that was too close to nearby trees, sparking the massive blaze. The company had reported a power outage in the area approximately 15 minutes before the wildfire had started. They later reported power equipment and a fallen pole riddled with bullet holes within the burn area.
At the moment PG&E reports that they only have $1.5 billion in cash and cash equivalents on hand. They also reported that they believe going through the bankruptcy process is in the best interest of stakeholders, including wildfire claimants. Shareholders, however, may be in for a harder time, as shares in PG&E dropped 55% in initial premarket trading after the filing.
