Shortly after announcing that it is to acquire US utility Energy East for E3.4 billion, Spanish utility Iberdrola has revealed that it will finance the purchase via an accelerated and privately placed capital increase. The decision was unanimously approved by the company's board.
This placement, through which 85 million new shares will be issued, representing approximately 7% of existing capital, will enable Iberdrola to reinforce shareholder funds and its solid financial situation while broadening the shareholder base.
Iberdrola has appointed ABN Amro Rothschild, Credit Suisse and JP Morgan as joint global co-ordinators and bookrunners to the transaction. The proceeds of the capital increase will be used to finance the acquisition of Energy East, which was also unanimously approved by the company’s board.
The new shares, which are not eligible for the final 2006 dividend (E0.593 per share to be paid on July 2, 2007), are expected to start trading on the stock exchange on June 29, 2007 with a different ISIN code. The two share types will be unified on July 2, when the new shares will have the same economic rights as the old shares.
The board also approved changes in Iberdrola’s auditing and compliance committee and resolved to modify the Iberdrola Group’s code of professional conduct. Among the changes are the inclusion of a vision statement and corporate values, including corporate responsibility and respect for the environment.