Wildfires Force PG&E To Restructure Debt

By on August 6, 2018

August 6, 2018

California’s biggest utility is exploring debt restructuring options in the face of liabilities stemming from wildfires in the state that could exceed $8 billion. And those were last year’s fires. Attorneys from Weil, Gotshal & Manges, the firm PG&E has turned to, will have to keep in mind potential liabilities from fires that are raging this year. The utility has already recorded a $2.5 billion pre-tax charge in its second-quarter earnings, much of it stemming from a deadly firestorm last autumn that officials say was sparked PG&E’s power lines. That blaze killed 46 people, and destroyed 8,900 homes. Regulatory curbs on how much the utility can charge consumers restrict its ability to make up losses through rate hikes. One of the options under consideration is breaking up the company, so that only one division files for bankruptcy. In a statement, PG&E called its situation financially unsustainable over the long term. It provides electricity and gas to more than 15 million people in Northern and Central California, has a market capitalization of $22 billion and long-term debt of $17.6 billion.
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