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An aerial view of vegetation regrowth amid areas destroyed or damaged by the Lahaina wildfire, including the iconic banyan tree (RIGHT C), on August 4, 2024 in Lahaina, Hawaii.Key Takeaways
Hawaiian Electric Industries will sell $500 million in stock to help pay for damages from the 2023 Maui wildfires.
The power company is pricing the stock at $9.25, a $1.65 discount from Monday's closing price.
Hawaiian Electric Industries has warned that it may not be able to continue as a viable operation because of the costs to cover the fire damages.
Shares of Hawaiian Electric Industries (HE), or HEI, tumbled Tuesday, a day after the holding company for the state's biggest power provider announced a major stock sale at a discounted price to help pay for damages related to last year's deadly Maui wildfires.
HEI is offering 54 million shares, worth half a billion dollars, as well as giving underwriters the option of purchasing $75 million more at the public offering price. The company is selling the stock at $9.25 each, $1.65 less than Monday's closing price. Shares of Hawaiian Electric sank more than 7% to $10.10 an hour after the opening bell Tuesday.
HEI said the money raised would be used "to fund its contribution to the expected Maui wildfire tort litigation settlement and for general corporate purposes."
HEI Recently Warned About Future Viability
The operator of Hawaiian Electric warned last month that it might not be able to continue as a viable operation because of the $1.71 billion it owes for damages incurred from the fires. It pointed out that it and Hawaiian Electric didn't have a financing plan in place to cover the costs. HEI and Hawaiian Electric settled a class-action lawsuit in August after being accused of negligence that led to the blazes.
Shares of Hawaiian Electric Industries have lost about 30% of their value this year.
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