Caribbean Utilities Company Ltd. announced this week it will conduct a rights offering to raise some US$28 million.
Cayman’s sole provider of electricity intends to use the net proceeds of the offering to repay approximately US$18.5 million of indebtedness, with the balance used to finance capital projects.
The rights offering will be made to eligible holders of record of outstanding Class A ordinary shares of the CUC at the close of business on 14 July, 2008. Those shareholders will have the opportunity to subscribe for additional Class A Ordinary Shares on the terms set forth in a rights offering circular that will to be mailed to them.
The circular will also be available at the Canadian Securities Administrators’ website at www.sedar.com.
Each Shareholder will receive one right for each Class A ordinary share held. Each ten rights entitle the holder to acquire one Class A ordinary share of the company upon payment of the subscription price of US$11.09 per share.
The rights offering expires at 4 pm on 15 August. Shareholders who exercise all of their rights will also be entitled to acquire additional Class A ordinary shares, if any, which are not subscribed for by other rights holders.
CUC President and Chief Executive Officer, Richard Hew spoke about the reasons for the rights offering.
‘The completion of this offering of Class A ordinary shares will strengthen our balance sheet and support capital expenditures necessary to meet continued growth in demand for electricity in Grand Cayman,’ he said. ‘In particular, it will assist in the financing of a 16 megaWatt capacity expansion to be carried out under our generation alliance relationship with MAN Diesel SE.’
Mr. Hew also noted that the offering of rights to raise equity ensured that existing shareholders had an equal opportunity to participate in acquiring additional shares.