CUC announces rights offering

Caribbean Utilities Company aims to raise about US$31 million with a rights offering that will give shareholders of record on March 27 the right to subscribe for additional class A shares.

CUC President and CEO Richard Hew said the completion of the offering will strengthen the company’s balance sheet and support capital expenditures necessary to meet continued growth in demand for electricity in 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 Oct. 3, 2014 that CUC was selected to provide this additional generation capacity subsequent to an open and competitive bid process,” he said.

Each 10 rights entitle the holder to acquire one Class A ordinary share of CUC for a subscription price of US$10.77 per share until the expiration of the rights at 4 p.m. (Toronto time) on April 30.

Shareholders who exercise all of their rights will be entitled to acquire additional remaining shares that have not been subscribed for by other rights holders.

A circular with the exact terms of the offering will be mailed to shareholders and is also available on the Canadian Securities Administrators’ SEDAR website.

CUC intends to use the net proceeds of the offering to finance a portion of the development of its new 39.7 MW diesel power plant and other ongoing capital expenditures.

The approximate cost of the generation expansion project is US$85 million. CUC raised initial funding by closing on a US$50 million private placement in November 2014. The rights offering is expected to raise the remaining funds.

Mr. Hew said the offering of rights to raise equity ensures that existing shareholders have an equal opportunity to participate in acquiring additional shares.

The rights will be mailed to eligible shareholders on April 7.

CUC shareholders who hold their class A ordinary shares indirectly through a broker or CDS Clearing and Depository Services should contact the service providers to determine how they can exercise their rights, CUC advised.

CUC’s largest shareholder Fortis Energy (Bermuda) Ltd. concluded a standby agreement according to which the company will purchase all the remaining shares that are not subscribed for by rights holders.

Richard-Hew

Mr. Hew

CUC-Headquarters-2

CUC aims to raise about US$31 million with a rights offering.
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