Hawaiian Electric price target lowered to $9 from $16 at Evercore ISI

Evercore ISI lowered the firm’s price target on Hawaiian Electric to $9 from $16 and keeps an In Line rating on the shares. The firm, which notes that by taking a $1.7B charge with Q2 results related to its settlement agreement that the amount got classified as a current liability that created a “going concern” risk, contends that Hawaiian Electric’s $500M block equity raise could potentially resolve this “going concern” risk. The firm assumes the company’s share of the settlement as it stands now is ultimately finalized through a court process, assumes $575M including the green shoe of common block equity proceeds are raised at the pricing of $9.25 per share, thinks Hawaiian can fetch $400M-$540M in proceeds for selling its American Savings Bank, and expects the remainder of the settlement to be financed with parent debt. The firm believes the language in one of the 8-Ks Hawaiian Electric filed last week is teeing up a process through which the company may try, “we suspect successfully,” to reclassify most of its current liability to long term with its auditor and notes that investors are likely to find out the answer to a potential reclassification along with Q3 results.