Problems continue to build
As the utility company was caught up in the fallout from the devastating wildfires in Maui, it said it had suspended its dividends and largely withdrawn its lending facilities as it faces a new lawsuit.
Hawaiian Electric (Ticker: HE) said in filings Thursday that it has suspended its quarterly dividend payment starting in the third quarter in an effort to boost its cash position. The group added that it had already drawn down $370 million of the unsecured revolving credit facility.
Credit ratings agency Standard & Poor’s followed Moody’s and Fitch downgrading the utility provider, dropping it from B- to BB-, citing potential inconsistencies in access to capital markets central to its long-term success. The group’s shares, which have already fallen 70% in the past month, lost another 22% in pre-market trading on Friday.
The province of Maui has also joined the crowd suing Hawaiian Electric, alleging in a lawsuit Thursday that the company acted negligently by failing to turn off equipment on the island despite a warning from the National Weather Service. The company faces accusations that downed power lines may have caused fires that devastated the town of Lahaina earlier this month in a tragedy that officials said killed at least 155 people, though that number is expected to rise. The company did not immediately respond to a request for comment.
The outlook looks difficult for Hawaiian Electric, which said last week that it is seeking advice but intends to continue as a financially strong utility. Without easy access to markets or more important lending facilities, the capital-intensive company is under increasing pressure. Legal risks and a deteriorating public reputation in the wake of the Maui wildfires add to the company’s woes.
Write to Jack Denton at email@example.com
(tags for translation) Energy