Matt Bigler

PG&E: What Now?

CEO Resignation, Bankruptcy Notice Rattle Markets

KCBS Radio Morning News
January 14, 2019 - 6:26 am
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SAN FRANCISCO (KCBS Radio) -- Investors are being jolted again by developments at PG&E. The utility giant delivered two jarring bits of news within hours: CEO Geisha Williams is stepping down, and the company served notice that it could file for Chapter 11 bankruptcy protection as early as January 29.

PG&E stock, which was trading at about $48 a share just before the massive Camp Fire erupted in Butte County on November 8, fell nearly 50% overnight to about $9 a share.

Numerous reports indicate PG&E is in negotiations with lenders about debt restructuring. "They're going to try to get people to accept less than what is owed," said CBS News Senior Business Analyst Jill Schlesinger in a KCBS Radio interview.

In its statement announcing the likely bankruptcy filing, PG&E said it expected the process to "support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires."  Those liabilities are estimated to be as high as $30 billion, while the company's wildfire insurance coverage represents only a small fraction of that amount.

The Camp Fire alone was recently pegged by German insurance giant MunichRe as the world's costliest disaster of 2018. The company said overall losses in the Camp Fire will reach $16.5 billion.

The rapid moves at PG&E create an increasingly uncerain landscape for investors, regulators, and legislators.  In San Francisco, officials served notice that they are studying a variety of options.

On Monday morning, a set of barricades appeared outside PG&E's headquarters building in San Francisco, though no sign of protesters was evident.

Barricades outside PG&E headquarters in San Francisco
Holly Quan/KCBS Radio