Hawaii utility provider keeps tumbling on downgrade and scrapped dividend

Hawaiian Electric is taking a severe beating in US premarket after being sued by the Hawaiian county of Maui.
Photo: Mike Blake
Photo: Mike Blake

Things have gone from bad to worse in a matter of days for utility company Hawaiian Electric, which on Friday will be sent further down in the US market after a lawsuit and downgraded credit rating.

On Thursday, the Hawaiian county of Maui announced that it is suing the company for negligence in connection with the massive wildfires that have ravaged the island and killed at least 115 people.

In addition, Maui Electric announced shortly afterwards that it will suspend its dividend to preserve sufficient capital and that the company has already drawn on USD 375m in revolving unsecured credit facilities

On Friday, the agency S&P lowered its credit rating to B- from BB-. This moves the company further into junk territory.

This comes just one week after the rating agency lowered its rating, knocking it to BB- from BBB-.

Hawaiian Electric operates the utility company that supplies power to Maui. Local authorities on the island have now sued the company for failing to turn off the supply despite warnings from meteorologists that conditions could create critical fire conditions.

Analysts, according to Bloomberg, have begun to raise questions about whether Hawaiian Electric, one of the smallest publicly traded US utilities, will be able to withstand the pressure if it ends up being found guilty.

The stock tumbles 17.3% in premarket trading to USD 9.82. At the beginning of August, a share in the company cost just over 39 dollars.

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