Hawaiian Electric stock plummets as lawsuits mount and talk of restructuring grows
CNN
By Nicole Goodkind, CNN
New York (CNN) — Shares of Hawaiian Electric Industries tumbled more than 20% on Thursday following a report that the largest power provider in Hawaii could be considering restructuring as it faces an onslaught of costly lawsuits for the role it may have played in Maui’s devastating wildfires.
The company’s stock is down more than 73% so far this year.
Shares plummeted to 13-year lows on Monday after a class action suit was filed alleging that the wildfires ravaging Maui were caused by energized power lines that were knocked down by strong winds.
The suit alleges that Hawaiian Electric Industries “chose not to deenergize their power lines during the High Wind Watch and Red Flag Warning conditions for Maui before the Lahaina Fire started,” despite knowing the risks of sparking a fire in those conditions.
At least two more lawsuits have been filed against the company for its alleged role in the fires that have killed at least 111 people on Maui and destroyed the town of Lahaina. That number is expected to rise, with as many as 1,000 people still missing.
On Thursday, The Wall Street Journal reported that the utility, which provides power to 95% of the state’s residents, has been talking to companies that specialize in restructuring, implying that declaring bankruptcy could be considered as a solution to mounting legal expenses.
The report comes two days after S&P Global downgraded Hawaiian Electric and all of its subsidiaries to BB-.
A BB- rating is considered below investment grade – commonly known as “junk.”
HEI did not respond to immediate requests for response but Hawaiian Electric vice president Jim Kelly told CNN on Sunday via email that, “as has always been our policy, we don’t comment on pending litigation.”
“Our immediate focus is on supporting emergency response efforts on Maui and restoring power for our customers and communities as quickly as possible. At this early stage, the cause of the fire has not been determined and we will work with the state and county as they conduct their review,” Kelly said.
He added that Hawaiian Electric does not have a formal shut-off program in place, and precautionary shut-offs have to be arranged with first responders. “Electricity powers the pumps that provide the water needed for firefighting,” he said.
Shares of HEI are on pace to close at their lowest level in nearly 40 years and are down about 63% since the fires began.
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