Electric and natural gas supplier Dominion Resources Inc. (D) announced that it will sell 20 million equity units, in two series of 10 million each. The units will be offered pursuant to an automatic shelf registration statement previously filed with the Securities and Exchange Commission.
The equity units will be issued at $50 per unit and will consist of a contract to purchase common stock issued by Dominion in the future. In addition, the equity unitholders will have a 1/20 undivided beneficial ownership interest in a remarketable subordinated note having a principal amount of $1,000.
As per the underwriting agreement, the underwriters to the issue were given an option to purchase 1 million additional equity units of Dominion Resources to cover over-allotments, if any.
Dominion intends to utilize the net proceeds from the equity offering for general corporate purposes and fund its future development plans, including the Cove Point liquefaction project.
The LNG liquefaction project in the Dominion Cove point facility is expected to play an important role in driving growth at the company. Dominion has plans to begin construction of this 5.25-MTPA (million tons per annum) facility in 2014 subject to regulatory approval. The liquefaction process is expected to begin from 2017 and become a hub for LNG export and import.
Dominion Resources currently carries a Zacks Rank #3 (Hold). Other electric utilities like ALLETE, Inc. (ALE), DTE Energy Company (DTE) and El Paso Electric Co. (EE) are performing well and currently have a Zacks Rank #2 (Buy).
Richmond, Va. based Dominion Resources Inc. was founded in 1909. The company together with its subsidiaries engages in producing and transporting energy in the U.S. With approximately 15,500 employees, the company’s market capitalization is $32.09 billion.
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