HEI Announces Sale of American Savings Bank, Creating Independent Investor-Owned Bank
Hawaiian Electric Industries (HEI) has completed the sale of 90.1% of American Savings Bank (ASB) to independent investors for $405 million, valuing the bank at $450 million. The transaction closed on December 31, 2024, with no single investor, including HEI, owning more than 9.9% of the bank's common stock.
The sale transforms ASB into an independent, local bank headquartered in Honolulu, maintaining its current management team and brand. HEI plans to use the proceeds to reduce holding company debt, increasing flexibility for funding wildfire settlement contributions and utility initiatives. The transaction simplifies HEI's structure, allowing it to focus on its core utility business, Hawaiian Electric, while likely removing its status as a savings and loan holding company.
Hawaiian Electric Industries (HEI) ha completato la vendita del 90,1% di American Savings Bank (ASB) a investitori indipendenti per 405 milioni di dollari, valorizzando la banca a 450 milioni di dollari. La transazione si è conclusa il 31 dicembre 2024, senza che alcun singolo investitore, compreso HEI, possieda più del 9,9% delle azioni ordinarie della banca.
La vendita trasforma ASB in una banca indipendente e locale con sede a Honolulu, mantenendo il suo attuale team di gestione e il marchio. HEI prevede di utilizzare i proventi per ridurre il debito della holding, aumentando la flessibilità per il finanziamento dei contributi per i risarcimenti da incendi boschivi e delle iniziative per i servizi pubblici. La transazione semplifica la struttura di HEI, consentendole di concentrarsi sul suo core business, Hawaiian Electric, rimuovendo probabilmente il suo status di holding per risparmi e prestiti.
Hawaiian Electric Industries (HEI) ha completado la venta del 90,1% de American Savings Bank (ASB) a inversores independientes por 405 millones de dólares, valorando el banco en 450 millones de dólares. La transacción se cerró el 31 de diciembre de 2024, sin que ningún inversor individual, incluido HEI, posea más del 9,9% de las acciones ordinarias del banco.
La venta transforma a ASB en un banco independiente y local con sede en Honolulu, manteniendo su actual equipo de gestión y marca. HEI planea utilizar los ingresos para reducir la deuda de la empresa matriz, aumentando la flexibilidad para financiar las contribuciones de acuerdos por incendios forestales y las iniciativas de servicios públicos. La transacción simplifica la estructura de HEI, permitiéndole enfocarse en su negocio principal, Hawaiian Electric, y probablemente eliminando su estatus como empresa de holding de ahorros y préstamos.
하와이 전기 산업(Hawaiian Electric Industries, HEI)는 4억 5천만 달러로 American Savings Bank(ASB)의 90.1%를 독립 투자자에게 4억 5백만 달러에 판매 완료했습니다. 이 거래는 2024년 12월 31일에 종료되었으며, HEI를 포함한 어떤 단일 투자자도 은행의 보통주를 9.9% 이상 소유하지 않습니다.
이번 매각은 ASB를 호놀룰루에 본사를 둔 독립적이고 지역적인 은행으로 변화시키며, 현재의 경영 팀과 브랜드를 유지합니다. HEI는 매각 수익을 하여 회사의 부채를 줄이는 데 사용할 계획이며, 이는 산불 합의 기여금 및 유틸리티 이니셔티브 자금을 위한 유연성을 증가시킬 수 있습니다. 이번 거래는 HEI의 구조를 단순화하여 하와이 전기와 같은 핵심 유틸리티 사업에 집중할 수 있게 하며, 아마도 저축 및 대출 홀딩 회사로서의 지위를 제거할 것입니다.
Hawaiian Electric Industries (HEI) a finalisé la vente de 90,1 % de American Savings Bank (ASB) à des investisseurs indépendants pour 405 millions de dollars, valorisant la banque à 450 millions de dollars. La transaction a été clôturée le 31 décembre 2024, sans qu'aucun investisseur unique, y compris HEI, ne détienne plus de 9,9 % des actions ordinaires de la banque.
La vente transforme ASB en une banque locale et indépendante dont le siège se trouve à Honolulu, maintenant son équipe de direction actuelle et sa marque. HEI prévoit d'utiliser les produits de cette vente pour réduire la dette de la société holding, augmentant la flexibilité pour le financement des contributions aux règlements des incendies de forêt et des initiatives de services publics. La transaction simplifie la structure de HEI, lui permettant de se concentrer sur son activité principale, Hawaiian Electric, tout en supprimant probablement son statut de société holding de prêts et d'épargne.
Hawaiian Electric Industries (HEI) hat den Verkauf von 90,1% der American Savings Bank (ASB) an unabhängige Investoren für 405 Millionen Dollar abgeschlossen, wodurch die Bank mit 450 Millionen Dollar bewertet wird. Die Transaktion wurde am 31. Dezember 2024 abgeschlossen, ohne dass ein einzelner Investor, einschließlich HEI, mehr als 9,9% der Stammaktien der Bank besitzt.
Der Verkauf wandelt ASB in eine unabhängige, lokale Bank mit Sitz in Honolulu um, die ihr aktuelles Management-Team und ihre Marke beibehält. HEI plant, die Einnahmen zur Reduzierung der Schulden der Holdinggesellschaft zu verwenden, um die Flexibilität zur Finanzierung von Beiträgen zu Waldbrand-Vergleichen und Versorgungsinitiativen zu erhöhen. Die Transaktion vereinfacht die Struktur von HEI, sodass sich das Unternehmen auf sein Kerngeschäft, Hawaiian Electric, konzentrieren kann, während wahrscheinlich der Status als Spar- und Darlehensholdinggesellschaft entfällt.
- Sale generates $405 million in cash proceeds
- Reduces holding company debt and increases financial flexibility
- Simplifies corporate structure and regulatory obligations
- Retains 9.9% ownership stake in ASB
- Loss of diversification and banking revenue stream
- Potential impact on overall company valuation due to reduced business scope
Insights
The
The debt reduction strategy using sale proceeds is particularly timely given HEI's strained balance sheet. By simplifying its corporate structure and eliminating banking regulatory oversight, HEI can streamline operations and focus capital allocation on its core utility business. Retaining a
The transaction's structure, with multiple investors each holding less than
This transaction's legal architecture demonstrates sophisticated regulatory compliance planning. By limiting individual ownership stakes to below
The timing of this divestiture is strategic from a liability management perspective, potentially providing HEI with greater flexibility in negotiating and funding wildfire-related settlements. The simplified corporate structure could also reduce regulatory compliance costs and streamline future strategic decisions, particularly around capital allocation and corporate restructuring.
This strategic divestiture reflects broader industry trends where utility holding companies are streamlining operations to focus on core competencies. The transaction's timing coincides with increasing pressure on regional banks and utilities' need for capital to fund grid modernization and climate resilience initiatives.
The market is likely to view this positively as it addresses several key concerns: First, it provides immediate capital for wildfire-related obligations without diluting shareholders through equity issuance. Second, it reduces HEI's exposure to banking sector volatility. Third, it simplifies the investment thesis for HEI, potentially attracting investors who prefer pure-play utility exposure.
The retention of ASB's management team and local branding should help maintain customer relationships and market share in Hawaii's banking sector, while the dispersed ownership structure ensures continued local control - a important factor in Hawaii's relationship-driven business environment.
- Sale simplifies HEI’s strategy and regulatory position, allowing HEI to focus on core utility business and regaining financial strength
-
Enables American Savings Bank to continue strong performance and best-in-class service for
Hawaii customers - Bank to maintain its current local leadership team, branches and brand
- HEI to use proceeds to reduce debt, increasing flexibility for funding wildfire settlement contributions and key utility initiatives, while reducing equity needs
The sale of the majority of HEI’s ownership in ASB follows the HEI Board of Directors’ (the “Board”) comprehensive review of strategic options regarding the bank, which was previously announced on August 9, 2024. In line with HEI’s stated focus on ensuring its enterprise is strong and financially healthy, the Board evaluated numerous potential paths forward for the bank and considered a range of factors including transaction certainty, proceeds, timeline to completion, regulatory considerations and potential stakeholder impacts.
The transaction closed December 31, 2024, with each Investor having a non-controlling interest in ASB. No investor owns more than
“This transaction marks an important step in HEI’s efforts to best position our companies to serve our customers and communities for the long term,” said Scott Seu, President and CEO of HEI. “As we navigate a dynamic time in the banking industry, we are confident selling
“This represents the best outcome for ASB, our customers, employees, and the communities we’ve served since 1925 as we focus on the next 100 years,” said Ann Teranishi, President and CEO of ASB. “We are excited about this next chapter for ASB.”
Additional Transaction Details
With the completion of the sale of most of its stake in ASB, HEI will operate as a simplified holding company with streamlined strategic focus on its utility, Hawaiian Electric. As an owner of
Advisors
Piper Sandler & Co. and Guggenheim Securities, LLC served as financial advisors to HEI and Sullivan & Cromwell LLP served as HEI’s legal advisor.
About HEI
The HEI family of companies provides the energy services that empower much of the economic and community activity of
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 SEC periodic reports and filings 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.
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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
How much did HEI sell American Savings Bank for in December 2024?
What percentage of American Savings Bank does HEI retain after the sale?
How will HEI use the proceeds from the American Savings Bank sale?
Will American Savings Bank maintain its current management and branding after HE's sale?
What is the maximum ownership percentage any single investor can have in ASB after HE's sale?
