California utility PG&E replaces CEO amid bankruptcy worries

California utility PG&E replaces CEO amid bankruptcy worries

California's largest utility company said on Sunday its chief executive had resigned as the firm faces billions of dollars in potential liabilities tied to the state's deadly and destructive wildfires a year ago. Shares of PG&E plunged 55% in initial premarket trading following the filing and was still down 40% shortly after 5 a.m. PT.

PG&E's financial woes have already spread to the companies that supply its natural gas and generate electricity for its customers.

In November, the most deadly fire in Californian history began in the town of Paradise, killing 86 people.

That would dwarf the US$1.5 billion in cash and cash equivalents on hand as of Friday.

PG&E said Monday that Williams will receive severance.

PG&E, which serves 15 million Californians - nearly 40% of the population of the state - warned then it could face "significant liability" beyond its insured amount if its equipment was found to have caused the fire.

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A notice may signal that the company has accelerated plans to make a Chapter 11 filing as way of dealing with crippling liabilities from the wildfires of 2017 and 2018 that killed more than 100 people and destroyed hundreds of thousands of acres.

"While we are making progress as a company in safety and other areas, the Board recognizes the tremendous challenges PG&E continues to face", said Board Chair Richard Kelly, in a statement. Reuters reported over the weekend that PG&E is in talks with investment banks about a multimillion-dollar bankruptcy financing package.

"We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion", said interim CEO John R. Simon in a prepared statement.

PG&E Corp.'s former Chief Executive Officer Geisha Williams will likely walk away with millions in cash after guiding California's biggest utility through a turbulent two years that may send it to bankruptcy court. Her departure follows the exit of three PG&E executives earlier this month - Patrick Hogan, senior vice president of electric operations at PG&E's utility unit; Kevin Dasso, vice president of electric asset management; and Gregg Lemler, vice president of electric transmission.

The company, which has 20,000 employees, has assured its customers it expects to continue supplying power "without disruption".

Williams knew the risks that she faced because of wildfires liabilities. In 2017, she became the first Latina CEO of a Fortune 500 company.

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