Hawaiian Electric sells 90% interest in American Savings Bank

(Reuters) — Hawaiian Electric Industries (HEI) said on Tuesday it had closed the deal to sell a 90.1% stake in its unit American Savings Bank (ASB), helping the company raise funds for the deadly 2023 Maui wildfire settlement.

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The deal values the bank at $450 million, with the investors purchasing 90.1% of ASB common stock for a cash consideration of $405 million.

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In November, HEI lifted a warning about its ability to remain in business, stating that a recent capital raise helped mitigate the concerns.

The utility had raised going concern doubts after disclosing that it did not have a financing plan in place for the $1.99 billion Maui wildfire settlement it reached in August.

The sale creates an independent, local bank headquartered in Honolulu, led by ASB’s current management team under its existing brand, the company said in a statement.

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“The sale allows HEI to enhance our focus on the utility as we work to help our state recover from the 2023 Maui wildfires and strengthen the financial and strategic position of our company,” CEO Scott Seu said.

The deal closed on Dec. 31, with each investor having a non-controlling interest in ASB. No investor owns more than 9.9% of the bank’s common stock, including HEI, which has retained a 9.9% stake.

With the completion of the sale of most of its stake in ASB, HEI will operate as a simplified holding company with a streamlined strategic focus on its utility, Hawaiian Electric.

HEI has been undertaking a comprehensive review of strategic options for Pacific Current, its wholly owned subsidiary, which remains ongoing.