Michael Lonergan

Michael Lonergan inquired about the latest appeal by subrogation insurers regarding the Maui wildfire tort settlement, specifically the likelihood of the Hawaii Supreme Court hearing the case or denying the appeal based on previous rulings. He also asked about the financing strategy for the second settlement payment, including the preference between debt and convertible debt and the timing relative to settlement approval. Additionally, Lonergan questioned the financing of the capital program, the potential use and cadence of the $250 million ATM program, and the timing and assumption of the remaining 9.9% American Savings Bank stake divestment in the financing plan.

Answer

Scott Seu, HEI President and CEO, stated that the appeal was recently filed with no briefing scheduled, noting that prior court decisions have been supportive of the settlements, but he would not speculate on the Supreme Court's actions. Scott DeGhetto, HEI EVP and CFO, confirmed no change in plans for the second settlement payment, leaning towards convertible debt based on market conditions, and clarified that financing would occur after settlement approval. DeGhetto also mentioned the ATM program is an opportunistic option depending on market conditions and reiterated the intent to divest the remaining American Savings Bank stake in calendar year 2026, subject to market and bank performance.