Hawaiian Electric sells 90.1% of American Savings Bank

Under pressure to secure its financial standing in the wake of the Maui wildfires, Hawaiian Electric Industries has completed a sale of 90.1% of its shares in American Savings Bank to independent investors.

HEI, which is responsible for roughly half of a $4 billion settlement with wildfire survivors, received $405 million in the transaction. HEI has already contributed $75 million to the One Ohana Initiative in partial fulfillment of its settlement obligation.

“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,” HEI president and CEO Scott Seu said in a statement released on Tuesday.

None of the 24 investors, which includes the bank’s executive team and independent directors, owns more than 9.9% of ASG common stock. HEI also retained a 9.9% interest in the bank.

The transaction drew a favorable response from state Sen. Jarrett Keohokalole, chair of the Senate Committee on Commerce and Consumer Affairs.

“The sale of ASB is a significant step by HEI to show that the company and their shareholders are taking responsibility for their financial situation in the wake of the Maui wildfires,” Keohokalole said in a statement released on Tuesday. “This, combined with their stock sale in September 2024, demonstrates that HEI is taking the concerns of the Legislature and rate payers seriously.”

Hawaiian Electric previously sought approval to raise rates to help cover the cost of the settlement. The proposal was supported by Gov. Josh Green, who said it would help prevent large rate increases in the future. However, Keohokalole and other legislators resisted giving the utility what they considered a blank check without a clear plan in place for stabilizing its financial condition.

HEI is now proposing a $1 billion dollar fund, created by a $4 per month additional charge to its customers, to cover claims related to future natural disasters.

“Our concern last session was adding to the cost of ratepayers’ electrical bills without assurances that Hawaiian Electric’s stockholders were doing their part to absorb the costs,” Keohokalole said. “Today’s announcement appears to validate those concerns. It is especially encouraging to hear that the sale is structured to keep local jobs and operations of a local bank in local hands.”

Michael Tsai covers local and state politics for Spectrum News Hawaii. He can be reached at michael.tsai@charter.com.