Hawaiian Electric Industries Inc. is in talks with restructuring firms to explore its legal and financial options following devastating wildfires in Maui, the Wall Street Journal reported Wednesday, citing people familiar with the matter.
Shares of Hawaiian Electric
HE,
fell more than 4% in the extended session Wednesday, following a 1.5% drop in the regular session. The stock is down 55% for the week.
The utility is mulling the strategies it can pursue and is looking to determine whether it needs to hire legal and financial advisers, the report said, after lawsuits alleging that its actions contributed to the devastation caused by the wildfires.
S&P Global Ratings on Tuesday cut its rating on the company’s debt to BB-, which is “junk” or speculative-grade status, making it more expensive for the company to borrow money.
S&P also placed its rating on CreditWatch negative, meaning the ratings agency could downgrade it again in the near term.
The wildfires on Maui have killed more than 100 people — with the death toll expected to rise in the coming days and weeks — and destroyed about 2,200 structures. S&P Global cited FEMA’s estimate of damages at more than $5.5 billion, or more than twice the company’s book equity of $2.2 billion.
Class-action lawsuits have been filed against Hawaiian Electric and subsidiaries including Maui Electric Co., which “has increased the risk of a material deterioration in [Hawaiian Electric’s] credit quality, should the plaintiffs prevail,” S&P Global said Tuesday.
This story originally appeared on Marketwatch
