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PG&E shares plunge on bankruptcy worries

08 January 2019

PG&E faces potential penalties in the billions from legal action related to 2017 and 2018 California wildfires.

Pacific Gas & Electric Company (PG&E) was getting hit hard Monday, down more than 18% at $19.93 a share, after a report out late Friday said it was considering filing for bankruptcy protection.

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 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. The spokesman did not address the sale rumor.

California's largest utility company is exploring bankruptcy protection amid concerns that its equipment could have caused one of the state's deadly wildfires a year ago.

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.

PG&E is also exploring selling its gas unit, potentially through a court-supervised auction during bankruptcy proceedings, one of the sources said.

The company said it has formed a special board committee that includes independent experts to advise on wildfire safety best practices.

Investigators have not determined the cause of a massive wildfire that destroyed the town of Paradise in November.

"Last year, they were able to fool the legislature with the narrative of bankruptcy or bailout, and the legislature gave them a bailout", said Hill, who represents the Bay Area city where a PG&E gas pipeline exploded in 2010, killing eight.

The utility has borrowed more than $3 billion under credit lines available to it, a move companies in financial distress will often make to shore up cash.

PG&E shares have plunged almost 50% since November 8, when the deadliest and most destructive wildfire in California history broke out. Furthermore, The Public Utilities Commission, Cal Fire, and federal prosecutors are all investigating the company as well.

PG&E shares plunge on bankruptcy worries