PG&E Corp., the bankrupt California utility giant, reported a $2.6 billion second-quarter loss and said it expects more charges this year tied to wildfires that devastated the state in 2017 and 2018.
The company, which didn’t provide an outlook for results, raised its 2019 forecast for after-tax costs tied to the blazes and its Chapter 11 case to as much as $4.1 billion, up from $1 billion to $1.4 billion. The San Francisco-based company filed for bankruptcy in January facing an estimated $30 billion in liabilities from wildfires blamed on its equipment.
PG&E’s bankruptcy case, the largest utility reorganization in U.S. history, has attracted some of the biggest names in the investment world including Pacific Investment Management Co., Elliott Management Corp. and Davidson Kempner Capital Management. On Thursday, two hedge funds disclosed that they’re seeking to raise $15 billion of equity to bolster the company’s plans to exit bankruptcy.
The utility’s second-quarter loss included a $3.9 billion pre-tax charge, and its adjusted earnings of $1.10 per share beat analysts’ estimates by 11 cents, according to a statement Friday. Shares of the company swung between gains and losses Friday, with the stock down 1.1% at $18.30 at 10:54 a.m. New York time. It rose as much as 1.4% earlier.
“We recognize we are operating from a deficit when it comes to public trust, and to regain that trust, we must sustain excellent operational performance day after day, month after month, year after year,” PG&E Chief Executive Officer Bill Johnson said in the statement Friday.
The results came on the same day as a deadline for PG&E and other parties to submit recommendations to the judge overseeing the company’s Chapter 11 proceedings on how to evaluate competing restructuring proposals. A group of creditors including Pimco and Elliott are pushing to take control of PG&E. The bondholders have put forward a $31 billion proposal that could give them control of 95% of PG&E’s stock.
After it exits bankruptcy, PG&E has agreed to make a $4.8 billion initial contribution to a $21 billion state wildfire fund. It will help utilities pay for future claims from wildfires tied to their equipment.
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