HEI Announces Common Stock Offering

Rhea-AI Summary

Hawaiian Electric Industries (NYSE: HE) has announced plans to offer $500 million worth of common stock shares. The company will grant underwriters an option to purchase an additional $75 million of shares. HEI intends to use the net proceeds to fund its contribution to the expected Maui wildfire tort litigation settlement and for general corporate purposes.

The offering will be managed by Wells Fargo Securities, Barclays Capital as joint lead book-running managers, and Guggenheim Securities as a book-running manager. The stock offering will be made through a prospectus supplement under HEI's effective registration statement on Form S-3ASR, as filed with the SEC.

Positive

• Raising $500 million through common stock offering
• Additional $75 million option for underwriters
• Funds to be used for Maui wildfire tort litigation settlement

Negative

• Potential dilution of existing shareholders' ownership
• Increased outstanding shares may impact earnings per share

Insights

Financial Analyst

Hawaiian Electric Industries' announcement of a $500 million common stock offering, with an additional $75 million option for underwriters, is a significant financial move. This capital raise is primarily aimed at funding the company's contribution to the expected Maui wildfire tort litigation settlement. The offering's size, representing about 41.9% of HEI's current market cap, indicates the substantial financial impact of the wildfire settlement. This dilutive action will likely pressure the stock price in the short term. However, it also demonstrates proactive management in addressing potential liabilities. Investors should closely monitor the pricing and market reception of this offering, as it will affect HEI's capital structure and financial flexibility. The use of proceeds for the settlement may provide some clarity on the company's future financial obligations, potentially reducing uncertainty for long-term investors.

Legal Expert

HEI's decision to raise capital for the "expected Maui wildfire tort litigation settlement" suggests that negotiations are at an advanced stage. This proactive approach could potentially limit the company's legal exposure and provide a clearer path forward. However, it also implies a significant financial burden related to the wildfires. The scale of the offering indicates that the settlement amount is substantial, which could set a precedent for utility companies' liability in natural disasters. Investors should consider the long-term implications of this settlement on HEI's regulatory environment and operational practices. While resolving the litigation may remove a major uncertainty, it could also lead to increased scrutiny and potentially stricter regulations for HEI and the broader utility sector in disaster-prone areas.

HONOLULU--(BUSINESS WIRE)-- Hawaiian Electric Industries, Inc. (NYSE: HE) (“HEI” or the “Company”) today announced it intends to make an offering of $500,000,000 of shares of its common stock. The Company’s common stock is listed on the New York Stock Exchange under the symbol “HE.”

The Company intends to grant the underwriters of the offering an option to purchase up to an additional $75,000,000 of shares of common stock at the public offering price less underwriting discounts and commissions.

HEI intends to use the net proceeds from the offering to fund its contribution to the expected Maui wildfire tort litigation settlement and for general corporate purposes.

Wells Fargo Securities, LLC and Barclays Capital Inc. are the joint lead book-running managers and Guggenheim Securities, LLC is a book-running manager for the offering.

The offering of common stock will be made by means of a prospectus supplement under HEI’s effective registration statement on Form S-3ASR, as filed with the Securities and Exchange Commission (“SEC”).

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor does it constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale is unlawful. The offering may be made only by means of a prospectus supplement relating to such offering and the accompanying prospectus. To obtain a copy of the prospectus supplement and related base prospectus for this offering, please contact Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at (800)-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com or Barclays Capital Inc., c/o Broadridge Financial Solutions 1155 Long Island Avenue, Edgewood, NY 11717, at (888) 603-5847 or email a request to Barclaysprospectus@broadridge.com.

About HEI

The HEI family of companies provides the energy and financial services that empower much of the economic and community activity of Hawaii. HEI’s electric utility, Hawaiian Electric, supplies power to approximately 95% of Hawaii’s population and is undertaking an ambitious effort to decarbonize its operations and the broader state economy. Its banking subsidiary, American Savings Bank, is one of Hawaii’s largest financial institutions, providing a wide array of banking and other financial services and working to advance economic growth, affordability and financial wellness. HEI also helps advance Hawai'i’s sustainability goals through investments by its non-regulated subsidiary, Pacific Current.

Forward-looking Statements

This release may contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates” or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic, political and market factors, among other things. These forward-looking statements are not guarantees of future performance.

Forward-looking statements in this release should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” discussions (which are incorporated by reference herein) set forth in HEI’s Annual Report on Form 10-K for the year ended December 31, 2023 and HEI’s other periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric, ASB and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240923148795/en/

Investor Contact

Mateo Garcia

Director, Investor Relations

ir@hei.com

(808) 543-7300

Media Contact

Julie Smolinski

VP, Strategy & Corporate Sustainability

media@hei.com

(808) 543-5874

Source: Hawaiian Electric Industries, Inc.

FAQ

What is the purpose of Hawaiian Electric Industries' (HE) $500 million stock offering?

Hawaiian Electric Industries (HE) plans to use the net proceeds from the $500 million stock offering to fund its contribution to the expected Maui wildfire tort litigation settlement and for general corporate purposes.

How much additional stock can underwriters purchase in HE's offering?

Underwriters have the option to purchase up to an additional $75 million of shares of common stock at the public offering price less underwriting discounts and commissions.

Who are the managers for Hawaiian Electric Industries' (HE) stock offering?

Wells Fargo Securities and Barclays Capital are the joint lead book-running managers, while Guggenheim Securities is a book-running manager for the offering.

How can investors obtain a prospectus for Hawaiian Electric Industries' (HE) stock offering?

Investors can contact Wells Fargo Securities at (800)-645-3751 or Barclays Capital Inc. at (888) 603-5847 to obtain a copy of the prospectus supplement and related base prospectus for the offering.