SAN FRANCISCO (Reuters) - A wildfire raging in California threatens to destroy more than homes and businesses - it could also undermine bankrupt PG&E Corp's PCG.N plan to raise $14 billion to finance the crisis-stricken utility's turnaround plan.

FILE PHOTO: PG&E crew work on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo

If the fire becomes large enough, investors could walk away from their commitment to finance the California power utility’s bankruptcy plan. That would put in doubt the company’s plan to provide up to $8.4 billion to victims of past fires blamed on the company’s equipment.

In Sonoma County north of San Francisco, the Kincade Fire has burned more than 75,000 acres in PG&E’s service area since breaking out on Oct. 23, forcing evacuation orders for some 180,000 people.

The fire has destroyed 124 structures and more than 90,000 are threatened amid strong winds and dry weather, according to CalFire, California’s fire-fighting agency.

The number of structures destroyed is key to PG&E’s bankruptcy exit plan. Any fire this year caused by PG&E that destroys more than 500 homes or commercial structures would trigger a clause in the financing agreement that would allow investors to back out. The agreement has a similar termination clause for next year.

PG&E said in court filings last week it has agreements to sell $14 billion of stock to affiliates of investment firms such as Abrams Capital Management LP, Knighthead Capital Management LLC and Soros Fund Management.

The cause of the Kincade Fire has not been determined. But it ignited near a broken wire on a PG&E transmission tower, raising concerns that the company’s equipment may again be to blame for a massive wildfire.

The San Francisco-based power producer in January filed for Chapter 11 bankruptcy protection anticipating its liabilities from massive wildfires in 2017 and 2018 blamed on its equipment could top $30 billion.

One of the blazes, November’s Camp Fire, leveled the town of Paradise and destroyed more than 14,000 structures in the deadliest and most destructive in California’s modern history.

PG&E’s main priority in its bankruptcy is paying thousands of wildfire victims, which it expects to do with $34 billion in debt financing and its $14 billion in equity commitments.

Wildfire victims have rejected PG&E’s plan and back a competing proposal by a group of the company’s bondholders.

Several investment firms that have committed to buy PG&E stock declined to comment or did not respond to requests for comment.

A principal at one firm, however, said the firms are standing by their commitments, noting they could simply choose to waive the termination clause even if the number of structures destroyed by the Kincade Fire tops 500.

Losses from the blaze so far appear small and a determination on its cause could be some time off, he added.

It took state investigators over a year to determine that PG&E was not at fault for October 2017’s Tubbs Fire, which struck Santa Rosa, California, and was the state’s most destructive wildfire until the Camp Fire.

PG&E spokesman James Noonan said the company and state authorities are only beginning to investigate what triggered the Kincade Fire.

“It’s too soon for us to be talking about an event for which there is no official cause,” he added.

Shares of PG&E Corp closed up more than 32 percent at $5.03 after a sharp selloff in recent days triggered by the Kincade Fire.