The largest power company in Hawaii, Hawaiian Electric Industries, may be considering restructuring as it deals with a flood of expensive lawsuits over its potential involvement in Maui’s devastating wildfires, according to a report that led to a more than 20% decline in share price on Thursday.
The value of the company’s stock has decreased by more than 73% this year.
Following the filing of a class action lawsuit alleging that the wildfires ravaging Maui were brought on by energized power lines that were knocked down by strong winds, shares of the company plunged to 13-year lows on Monday.
According to the lawsuit, 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 being aware of the dangers of starting a fire in those circumstances.
For its alleged involvement in the fires that allegedly claimed at least 111 lives on Maui and destroyed the town of Lahaina, the company is facing at least two more lawsuits. With up to 1,000 people still unaccounted for, that number is anticipated to increase.
According to a Thursday article in The Wall Street Journal, the utility, which provides electricity to 95% of the state’s residents, has been in contact with restructuring firms and may be considering filing for bankruptcy as a way to reduce growing legal costs.
Two days prior, Hawaiian Electric and all of its subsidiaries were downgraded to BB- by S&P Global.
Uninvestment grade, or “junk,” is a rating of BB- or lower. “.
Jim Kelly, a vice president at Hawaiian Electric, stated in an email to the media on Sunday that “as has always been our policy, we don’t comment on pending litigation “.
HEI’s “immediate focus is on restoring power for our customers, supporting Maui residents and developing a long-term recovery plan. Hundreds of Hawaiian Electric employees from across the islands are on the front lines on Maui, working with many others to safely restore electricity, assess damage, remove debris and support our families, neighbors and employees”, a company spokesperson said.
Source-CNN
