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Banks agree to lend $250M to Hawaiian Electric

HONLULU — Hawaiian Electric Industries Inc. announced Thursday that its utility subsidiary has secured a $250 million credit line subject to state regulatory approval.

HEI, parent of Hawaiian Electric Co., said in a filing with the U.S. Securities and Exchange Commission that the credit agreement was made with several banks on May 17.

Under the arrangement, if approved by the state Public Utilities Commission, Hawaiian Electric will be able to borrow up to $250 million secured by revenue from substantially all of its customers.

An initial term of the credit facility is for one year with an automatic extension to three years, though both the one- and three-year terms are subject to PUC approval. The deal with the banks also includes three separate options to extend one additional year subject to consent of the lenders.

Hawaiian Electric has said in recent months that it was working on the credit line as part of an effort to bolster its financial ability to deal with litigation over the Aug. 8, 2023, Maui wildfire disaster and to mitigate wildfire risks on O‘ahu, Hawai‘i Island and Maui County where the company has about 471,000 customers.

In late August 2023, Hawaiian Electric and HEI tapped $370 million from existing credit lines. HEI also suspended its stock dividend at the time, representing about $40 million in cash retention quarterly.

At the end of March, HEI and Hawaiian Electric reported having $257 million in cash on hand, up from $243 million at the end of 2023.

Hawaiian Electric has previously said it expects a PUC decision on the $250 million credit line by June 24.

Around 400 lawsuits have been filed against the utility company alleging that a Hawaiian Electric power line blown down in gale-force winds was the cause of a fire that destroyed most of Lahaina and killed 101 people.

Hawaiian Electric has vowed to vigorously contest litigation blaming the company for the disaster.

One rough estimate of property damage from the fires is $5.6 billion. An official cause of the fire has yet to be determined.
Source: The Garden Island

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