CUC sells off shares to raise $30M
Caribbean utilities Company (CUC)
(CNS Business): Shareholders in Caribbean Utilities Company (CUC) are being invited to buy more shares in the local power provider as it seeks to raise around US$31 million to help fund extra generating capacity. The rights offering to existing shareholders only, for Class A ordinary shares, opens on 27 March and will close on 30 April. CUC President and Chief Executive Officer Richard Hew said it would also strengthen the company’s balance sheet and help with the capital investment to meet the growing demand for electricity on Grand Cayman.
“In particular, it will assist in the financing of the development of a new 39.7 MW diesel power plant, following from the announcement by the Electricity Regulatory Authority on October 3, 2014 that CUC was selected to provide this additional generation capacity subsequent to an open and competitive bid process,” Hew said.
In October last year CUC won the open bid by the Electricity Regulatory Authority to supply itself with extra power. The firm was awarded the right to build an additional 39.7 megaWatts of generation capacity which is expected to cost around US$85 million. In November 2014, CUC closed on a US$50 million private placement to provide the initial investment for the project.
The rights offering will provide the balance for the project as well as other ongoing capital expenditures.
Hew said the offering to raise the equity ensures existing shareholders have an equal opportunity to participate in acquiring additional shares. The firm said each shareholder will receive one right for each Class A Ordinary Share held on the record date. Each ten rights entitle the holder to acquire one Class A Ordinary Share at a subscription price of US$10.77 per share among other requirements. Shareholders who exercise all of their rights will be able to buy more with additional subscription if they are available after all shareholders have been given an opportunity.
Fortis Energy Ltd, which is CUC’s largest shareholder, has entered into a stand-by agreement with the company to purchase all Class A Ordinary Shares issuable on the exercise of Rights which are not acquired by other holders of Rights or pursuant to the additional subscription privilege.
The circular for the rights is available at the Canadian Securities Administrators’ SEDAR website at www.sedar.com. CUC officials said the circular and certificates representing the rights will be mailed to shareholders. The rights will be listed on the TSX under the trading symbol “CUP.RT.U” and will be posted for trading on the TSX until 12:00 noon (Toronto Time) on the Expiration Date. The TSX has approved the listing of the Class A Ordinary Shares issuable upon the exercise of the Rights subject to the Company fulfilling all of the requirements of the TSX.
Category: Local Business, Uncategorized
I really don’t think that a headline CUC “sells off” shares which has a somewhat negative slant is appropriate for the underlying story. A balanced headline would read “CUC share offering to raise $30M”