(Reuters) – Hawaiian Electric shares slumped 18% before the bell on Friday as the utility suspended its dividend, while S&P Global Ratings downgraded its credit rating deeper into “junk” territory amid scrutiny over its role in the Maui wildfires.
The largest power supplier in the island state said it would invest $200 million that it withdrew from its credit account in highly liquid assets along with the $170 million drawn by parent Hawaiian Electric Industries to shore up its balance sheet.
S&P Global Ratings cited the utility’s likely inconsistent access to capital markets after the wildfire to downgrade the firm and its units to ‘B-‘ from ‘BB-‘, its second rating cut this month.
Moody’s and Fitch had also downgraded Hawaiian Electric to junk status in August.
The Honolulu-based company is being sued by the Maui county which has alleged that it acted negligently by failing to shut down power, leading to wildfires on Aug.8 that destroyed the coastal town of Lahaina and killed more than 114 people.
However, the company last week said that shutting off power was not part of its high-wind management protocol. An official cause of the fires has not yet been determined.
The utility’s market value has slumped more than 60% to $1.30 billion since the wildfires. The stock is trading 5.6 times its forward earnings estimate, well below its 2023 peak multiple of 18.4, according to Refinitiv data.
(Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur)
