Shares of Hawaiian Electric Industries tumbled more than 20% on Thursday following a report that the largest power provider in Hawaii could be considering restructuring as it faces an onslaught of costly lawsuits for the role it may have played in Maui’s devastating wildfires.
The company’s stock is down more than 73% so far this year.
Shares plummeted to 13-year lows on Monday after a class action suit was filed alleging that the wildfires ravaging Maui were caused by energized power lines that were knocked down by strong winds.
The suit alleges that 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 knowing the risks of sparking a fire in those conditions.
At least two more lawsuits have been filed against the company for its alleged role in the fires that have killed at least 111 people on Maui and destroyed the town of Lahaina. That number is expected to rise, with as many as 1,000 people still missing.
On Thursday, The Wall Street Journal reported that the utility, which provides power to 95% of the state’s residents, has been talking to companies that specialize in restructuring, implying that declaring bankruptcy could be considered as a solution to mounting legal expenses.
The report comes two days after S&P Global downgraded Hawaiian Electric and all of its subsidiaries to BB-.
A BB- rating is considered below investment grade – commonly known as “junk.”
Hawaiian Electric vice president Jim Kelly told CNN on Sunday via email that, “as has always been our policy, we don’t comment on pending litigation.”
On Thursday, a company spokesperson told CNN that 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.”
The spokesperson added that the company “employs a wildfire mitigation and grid resilience program with a focus on vegetation management, grid hardening and pole replacement and routine line and equipment inspections.” Since 2018, they said, HEI has spent about $84 million on maintenance and management in Maui County.
