Portland General Electric Company (POR) announced that it intends to make equity offerings of up to 11.1 million shares with an option to sell 1.665 million shares to the underwriters to cover up over-allotment.
The proposed equity sale will be carried out under the shelf registration statement filed with the Securities and Exchange Commission that came into effect on Nov 18, 2010
Portland General plans to utilize the net proceeds from the stock offering to reduce its debts. The balance will be used for financing capital expenses and for general corporate purposes.
Of late, the company has taken up some big-time projects to accelerate its future prospects. Recently, Portland General disclosed its $1.0 billion investment plan to construct a new gas-fired power plant in Central Oregon and a wind farm in Southeastern Washington.
Portland General has also entered into a non-binding deal with the Bonneville Power Administration to purchase 1,500 megawatt (MW) of transmission capacity.
We believe the company’s series of growth-centric projects will involve substantial capital expenditures, which require the raising of funds. The equity offering is a step in that direction. Portland General at present retains a Zacks Rank #3 (Hold).
The last stock sale was concluded in Mar 2009 when the company sold off 2.4775 million shares of its common stock at $14.10 per share. Portland General received gross proceeds of roughly $175.9 million from that transaction which were utilized to repay all outstanding short-term debts with the remaining left for financing capital expenses as well as for general corporate purposes.
Based in Portland, Ore., Portland General, an integrated electric utility, engages in the generation, purchase, transmission, distribution, and retail sale of electricity in the state.
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