Hawaiian Electric Industries, Inc. (HEI) has announced the sale of 90.1% of the common stock of American Savings Bank, F.S.B (ASB) to independent investors for a transaction value of $450 million, with the investors purchasing the majority stake for an aggregate cash consideration of $405 million. This sale simplifies HEI's strategy and regulatory position, allowing the company to focus on its core utility business and regain financial strength.
The sale of the majority stake in ASB follows a comprehensive review of strategic options and is in line with HEI's focus on ensuring its enterprise is strong and financially healthy. As a result of this transaction, HEI will operate as a simplified holding company with a streamlined strategic focus on its utility, Hawaiian Electric.
Following the completion of the sale, HEI will retain a 9.9% stake in ASB, and it is expected that the company will no longer be subject to regulation as a savings and loan holding company. The sale of ASB also provides opportunities to increase efficiency, which HEI and Hawaiian Electric will evaluate moving forward.
The proceeds from the sale will be used to reduce holding company debt, increasing flexibility for funding wildfire settlement contributions and key utility initiatives, while reducing equity needs. This is particularly important as HEI works to help the state recover from the 2023 Maui wildfires and strengthen its financial and strategic position.
The sale enables ASB to continue its strong performance and best-in-class service for Hawaii customers. ASB will maintain its current local leadership team, branches, and brand, and will be led by its current management team under its existing brand as an independent, local bank headquartered in Honolulu.
It’s worth noting that Piper Sandler & Co. and Guggenheim Securities, LLC served as financial advisors to HEI, and Sullivan & Cromwell LLP served as HEI’s legal advisor in this transaction. HEI is the family of companies that provide energy services empowering much of the economic and community activity in Hawaii. Hawaiian Electric, a subsidiary of HEI, supplies power to approximately 95% of Hawaii’s population and is undertaking an ambitious effort to decarbonize its operations and the broader state economy, as well as modernizing and hardening the grid to ensure resilience and public safety. HEI also helps advance Hawaii’s sustainability goals through investments by its non-regulated subsidiary, Pacific Current. Following these announcements, the company's shares moved -2.8%, and are now trading at a price of $9.46. For the full picture, make sure to review Hawaiian Electric Industries's 8-K report.
