Caribbean Utilities Company is inviting existing shareholders to buy more shares with a rights offering. If all of the rights issued are exercised, CUC expects to raise US$47.8 million.
Under the offering, holders of Class A ordinary shares of the company at the close of business on 1 Sept. have the option to subscribe for more Class A shares. The rights offering applies to Cayman and all provinces of Canada.
Shareholders will receive one right per share, entitling the holder to subscribe for 0.10 of a Class A ordinary share. In other words, 10 rights entitle the holder to purchase one share at the subscription price of US$14.24. The rights are expected to trade on the Toronto Stock Exchange (TSX) from 31 Aug. The rights offer expires on 26 Oct. at 4 pm Toronto time.
This year the company’s share price has traded on the TSX as high as $17 and as low as $13.25. The share price yesterday (25 Aug.) stood at $15, giving the utility company a market capitalisation of about $504 million. There are currently 33,593,624 Class A ordinary shares issued and outstanding.
CUC aims to use the proceeds of the rights offering to refinance existing debt and for general corporate purposes, the company said in a press release.
The electricity provider has entered into a stand-by purchase agreement with Fortis Energy Bermuda, a subsidiary of CUC’s controlling shareholder Fortis Inc., to buy all of the shares that are not purchased under the rights issue at the subscription price.
Fortis owns about 58% of the issued and outstanding Class A ordinary shares on a non-diluted basis.
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