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Credit ratings agency Standard & Poor’s followed Moody’s and Fitch downgrading the utility provider
Paula Ramone/AFP via Getty Images
Problems continue to build
Electric Hawaii
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As the utility company was caught up in the fallout from the devastating wildfires in Maui, it said it had suspended its dividends and largely withdrawn its lending facilities as it faces a new lawsuit.
Hawaiian Electric (Ticker: HE) said in filings Thursday that it has discontinued its quarterly dividend as of the third quarter in an effort to boost its cash position. The group added that it had already drawn down $370 million of the unsecured revolving credit facility.
Credit ratings agency Standard & Poor’s followed Moody’s and Fitch downgrading the utility provider, dropping it from B- to BB- in a ratings action on Thursday. S&P noted that the group has essentially relied entirely on its $375 million consolidated revolving credit facility and is likely to face inconsistent access to the capital markets that are central to its long-term success.
The group’s shares, which have already fallen 70% in the past month, lost another 21% in pre-market trading on Friday.
The province of Maui has also joined the crowd suing Hawaiian Electric, alleging in a lawsuit Thursday that the company acted negligently by failing to turn off equipment on the island despite a warning from the National Weather Service. The company faces accusations that downed power lines may have caused fires that devastated the town of Lahaina earlier this month in a tragedy. Officials said the accident killed at least 115 peopleAlthough this number is expected to rise.
The company did not immediately respond to a request for comment.
The outlook looks difficult for Hawaiian Electric, which said last week that it is seeking advice but intends to continue as a financially strong utility. Without easy access to markets or more important lending facilities, the capital-intensive company is under increasing pressure. Legal risks and a deteriorating public reputation in the wake of the Maui wildfires add to the company’s woes.
S&P said it believes Hawaiian Electric’s goals are to maintain its financial health, but sees the company’s engagement with financial advisors as “an additional indication of the potential for negative developments regarding its ability to service its debt in the future.”
Write to Jack Denton at [email protected]
(tags for translation) Energy
