HEI to Pay $1.99B in Maui Wildfire Settlement

By Bobby Samwell • Monday, August 05 07:57 • Permanent Link

Hawaiian Electric Industries, Inc. (NYSE: HEI) has announced a significant update following the global settlement in the Maui wildfire tort litigation. The company, along with its subsidiary Hawaiian Electric Company, Inc., and other parties, has reached an agreement in principle to settle all tort claims related to the August 2023 wildfires on Maui.

Under the proposed settlement, the defendants, including HEI and Hawaiian Electric, would collectively pay over $4 billion to resolve all tort claims arising from the wildfires. HEI and Hawaiian Electric's contribution to this settlement is a total of $1.99 billion (pre-tax), which includes the $75 million previously contributed for the One ʻOhana Initiative, to be paid in four installments.

The settlement terms were reached after four months of mediation between the defendants and attorneys representing plaintiffs from Lahaina and Upcountry Maui. Once a final settlement agreement is signed, it will take effect following judicial review and approval. The payments are expected to begin no earlier than mid-2025.

With the agreement in principle now in place, HEI is working closely with its financial advisors to develop a financing plan for the settlement contribution. The company intends to finance the settlement payments through a mix of debt, common equity, equity-linked securities, or other potential options.

HEI plans to further discuss the settlement in its quarterly earnings call scheduled for Friday, August 9.

The HEI family of companies provides energy and financial services in Hawaii, with Hawaiian Electric supplying power to approximately 95% of the state's population. The company's banking subsidiary, American Savings Bank, is one of Hawaii’s largest financial institutions, and its non-regulated subsidiary, Pacific Current, helps advance the state’s sustainability goals through investments.

This settlement represents a significant development for HEI and Hawaiian Electric as they work towards resolving the wildfire-related tort litigation and regaining strength in their enterprise. Today the company's shares have moved -3.8% to a price of $16.06. For more information, read the company's full 8-K submission here.

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