PG & E plunges more than 25% on the fear of suffering damages amounting to 18 billion dollars

PG & E utility shares fell on Monday after a judge ruled that a jury could decide whether the company was paying up to $ 18 billion damages to the victims of the fire.

California 's supplier of gas and electricity fell to $ 10.05, or about 30%, on the first trading day of the week, before reducing overnight losses to about 27%. This dive was the worst day on Wall Street since PG & E announced its first bankruptcy project in January.

US bankruptcy judge Dennis Montali said Friday that a trial could decide whether PG & E was responsible for the Tubbs fire in 2017, which killed 22 people and destroyed more than 5,600 buildings.

This fire, the second most destructive in the history of the state, preceded the camp fire of 2018, which has become the worst of California. PG & E must also take responsibility for this fire.

"Whatever the next legal steps, Cal Fire has already determined that the cause of the Tubbs Fire 2017 was not related to PG & E equipment," said PG & E in a statement. "PG & E has made significant progress in developing a viable, fair and comprehensive reorganization plan that will compensate forest fire victims, protect customer rates and put PG & E on the path to become the energy company that our customers need and deserve. "

Montali's decision was nonetheless enough to arouse Wall Street investors' concern, analysts such as Citi's Praful Mehta calling the development "too risky".

"Although Calfire clearly noted that PG & E's equipment was not involved in the beginning of the Tubbs fire, we believe that a jury trial introduced many more dynamic, especially given PG & E's tradition of safety and operational culture, "wrote the analyst. Monday, downgrading the stock to a trading level.

This decision marks a critical development for PG & E, which at the beginning of the year was no longer responsible for the Tubbs fire when California investigators concluded that the flame was the result of a private electrical system. . However, the company managed to maintain control of its multi-billion dollar bankruptcy plan, a victory for the company in the face of growing investor fear.

PG & E applied for Chapter 11 in January, facing a potential liability of $ 30 billion.

"This risk of significant liability for Tubbs is now very real and adds a lot of uncertainty to the history of PCG," added Mehta. The analyst estimates that the company is worth $ 4 per share, less than half of its current value.