Hawaiian Electric HE.N said the lawsuit filed against it by the county of Maui was “factually and legally irresponsible,” pointing to the county’s responsibility in the Hawaii wildfires.
The company’s shares jumped 30.2% to $12.58 in premarket trading. The stock has lost more than half of its value since the Aug. 8 wildfire.
The county of Maui, Hawaii, last week sued Hawaiian Electric, accusing the power company of acting negligently by failing to shut down its equipment despite warnings that hurricane winds could knock power lines down, sparking wildfires.
The county said downed power lines started the wildfires that destroyed the historic town of Lahaina earlier this month, killing at least 115 people and displacing hundreds more.
The company said a morning fire on Aug. 8 caused by power lines that fell in high winds was subsequently reported “100% contained” and later declared “extinguished” by the Maui County Fire Department.
It said another afternoon fire started in the same area more than six hours after all of its power lines in West Maui had been de-energized, which could not be contained by the fire department and spread out of control toward Lahaina.
“We were surprised and disappointed that the County of Maui rushed to court even before completing its own investigation,” said Shelee Kimura, president and CEO of Hawaiian Electric.
The S&P Global Ratings on Thursday downgraded Hawaiian Electric to ‘B-‘ from ‘BB-‘, citing the company’s likely inconsistent access to the capital markets in the aftermath of the wildfires.
Hawaiian Electric shares plunged on Friday to their lowest level since 1984 as the lawsuit raised investor worries over the financial health of the utility that has paused dividend payouts.
(Reporting by Deep Vakil in Bengaluru, Editing by Louise Heavens and Mark Potter)
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