PG&E is tanking after report says it's considering filing for bankruptcy protection

Following the deadly and destructive Camp Fire an aerial view of the Northern California town of Paradise is seen on Nov. 15 2018

PG&E is tanking after report says it's considering filing for bankruptcy protection

But the preparations could put pressure on California politicians hoping the company can avoid such an outcome.

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

Because of potential legislative aid, PG&E has not yet determined whether it will make a bankruptcy filing, Reuters reported. His agency later began a formal process to evaluate whether to break up or take over PG&E's Pacific Gas and Electric utility.

And Daniel Ford of UBS Group AG on Monday raised his 12-month price target for PG&E to US$29 from US$26, based on recent disclosures by the company asserting it is not responsible for the 2017 Tubbs fire, the second-most destructive in state history.

The company has considered seeking financial shelter in bankruptcy court because of the potential liabilities, Reuters reported, citing anonymous sources.

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Shares of the company were trading down at US$20 in premarket trading, its lowest since mid-November. "You can't trust what they say".

PG&E shares have plunged almost 50% since November 8, when the deadliest and most destructive wildfire in California history broke out.

In November, California Assemblyman Chris Holden said a bill would be introduced in January to help PG&E absorb potential liabilities from the latest wildfires. In response to a request for a comment from Fortune, PG&E emailed: "T$3 he PG&E Board is reviewing structural options to best position PG&E to implement necessary changes while meeting customer and operational needs".

" Legislation is the way forward as it will allow to keep the utility alive and mitigate any negative impact one can get from the bankruptcy", Pourreza said.

Earlier on Friday, PG&E said in a statement that it's already weighing changes to both its board and how its businesses are structured. But that is just a possibility, they said, so bankruptcy preparations are being made.

PG&E could wait to see how things play out in California, or it could opt for a bankruptcy proceeding that would prove more predictable and free the company from the mercy of state policy makers, Bloomberg Intelligence analyst Kit Konolige said.

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