Hawaiian Electric shares plunge after utility is sued over devastating Maui fires

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Shares of Hawaiian Electric Company’s parent fell more than 18% by market close Friday, one day after the utility was sued by Maui County over the fires that devastated Lahaina

NEW YORK — Shares of Hawaiian Electric Co.'s parent fell more than 18% by market close Friday, one day after the utility was sued by Maui County over the fires that devastated Lahaina earlier this month.

Maui County accused Hawaiian Electric of negligently failing to shut off power despite exceptionally high winds and dry conditions — saying that the destruction from the deadly Aug. 8 fires could have been avoided if the company had taken essential actions. Outrage towards Hawaiian Electric grew as witness accounts and video indicated that sparks from power lines ignited fires as utility poles snapped in the winds, which were driven by a passing hurricane.

In the weeks since the fires — which killed at least 115 people and left an unknown number of others missing — broke out, Hawaiian Electric Industries Inc.'s market capitalization has fallen from $4.1 billion to $1.1 billion.

Late Thursday, the company said it would suspend its quarterly dividend of 36 cents per share, starting in the third quarter, in order to improve its cash position.

In a Friday report, analysts at Wells Fargo said that Hawaiian Electric is “potentially under severe financial duress” and “could face a future liquidity event” — pointing to the company's struggles to bring in external funds, recent downgrading of credit ratings from the S&P, as well as the costs of normal operating expenses and an upcoming $100 million debt maturity for the utility.

“The investigative and legal processes needed to potentially absolve the utility of the mounting wildfire-related liabilities