Maui Wildfire Damages Prompt Hawaiian Electric to Raise Capital Through Discounted Stock Sale
In a move to mitigate the financial burden of the devastating 2023 Maui wildfires, Hawaiian Electric Industries (HEI) has announced plans to issue $500 million in stock at a discounted price of $9.25 per share. This marks a $1.65 reduction from Monday’s closing price, sparking a 7% decline in HEI’s shares to $10.10 within the first hour of trading on Tuesday.
The company is offering 54 million shares, with an additional $75 million option for underwriters to purchase at the public offering price. The proceeds will be utilized to cover the anticipated settlement costs related to the Maui wildfire tort litigation and for general corporate purposes.
HEI’s financial future has been uncertain since the wildfires, with the company warning last month that it may struggle to remain viable due to the staggering $1.71 billion in damages it owes. The lack of a financing plan to cover these costs has raised concerns about the company’s ability to recover from the disaster.
In August, HEI and its subsidiary, Hawaiian Electric, settled a class-action lawsuit alleging negligence in connection with the wildfires. The settlement has added to the company’s financial woes, contributing to a 30% decline in its stock value this year.
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