Hawaiian Electric Industries Inc. slumped to the lowest since 1984 after the company said it will draw down on credit lines and suspend its dividend to preserve cash in the wake of deadly wildfires on Maui.
(Bloomberg) — Hawaiian Electric Industries Inc. slumped to the lowest since 1984 after the company said it will draw down on credit lines and suspend its dividend to preserve cash in the wake of deadly wildfires on Maui.
The shares tumbled as much as 24% in New York on Friday. Hawaiian Electric, which owns the utility that serves Maui, disclosed after markets closed Thursday that it will halt dividend payouts starting in the third quarter, an unusual move that indicates potential financial distress.
Hawaiian Electric Industries and its Hawaiian Electric utility unit also drew $170 million and $200 million, respectively, on their revolving credit lines. It will use the proceeds to invest “in highly liquid short-term investments,” according to a filing.
Three independent directors who served on the board of Hawaiian Electric Industries and American Savings Bank, which is owned by the utility’s parent company, will serve exclusively on the bank’s board, which “enables these directors to focus solely on the bank’s business.” The company said customer deposits at the bank aren’t at risk from legal claims tied to the fires.
Hawaiian Electric has come under scrutiny for the role its power lines may have played in sparking the Maui fires that razed the town of Lahaina and killed 115 people. Maui County filed suit against the utility-owner on Thursday for civil damages caused to public property, alleging the utility acted negligently by failing to cut power despite a forecast for critical fire conditions. Hawaiian Electric also faces numerous other lawsuits filed on behalf of fire victims.
–With assistance from Bre Bradham.
(Updates shares in second paragraph)
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