Deadly Wildfire Damage Causes PG&E To File For Bankruptcy

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Deadly Wildfire Damage Causes PG&E To File For Bankruptcy

PG & E, the largest power utility in the United States has filed for bankruptcy under Chapter 11 in California.

 But shares went by up by 17 percent during trading hours on Tuesday, after the power company filed for bankruptcy.

Camp Fire that broke out unexpectedly in California has resulted in a loss of almost $16.5 billion for Pacific Gas and Electric.

The fire was one of the worst natural disasters and the most expensive one of 2018, says Munich Re, the Reinsurance Company. The fire started when a power line of PG&E came into contact with the nearby trees.

When the company announced that it was going to file for bankruptcy, early this month, the shares of PG & E, plunged downwards. The company was accused of being negligent. There have been a series of wildfires previously in 2017. The PG&E CEO who has now stepped down has blamed the calamity on global warming and climate change.

The Camp Fire that occurred in California was considered the worst natural disaster as it killed about 88 people in which 14,000 homes have been destroyed. Many other buildings and businesses have been destroyed.

About $11.4 billion has been lost by insurers who had to repay the claim, says the commissioner of California Insurance. PG&E has said that it had lost about $16 5 billion from the Camp Fire.

The shares saw a sharp recovery on Tuesday as investors were speculating on how much equity, holders would recover.

PG & E has a debt of $19 billion and it may take two years to come out from the bankruptcy.

On Tuesday, the shares of PG & E closed at $13.99, while it had a market value of $7.26 billion. The stock was at its 52 weeks high in November when it was quoted at $49.42 per share. However, the company has lost almost 71 percent of market value after this.

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Christopher Madsen
Being good with numbers and having a Bachelors Degree in Business Administration, Christopher Madsen here works as the manager and lead for Business department. He has a significant experience of 6 years at Industry News Center. Apart from training a few interns, he also looks after the finance at Industry News Center. In his free time, Christopher will be seen chilling at home with couple of friends, watching his favorite series on Netflix.

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