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PPL Corp. to Issue Common Shares

Zacks Equity Research

Diversified utility PPL Corporation (PPL) announced that it has commenced the process of an underwritten public offering of 9.9 million of its common shares. The company will allow the underwriters of the issue to purchase up to 1.485 million additional common shares to cover over-allotments, if necessary.

The issue was made in accordance with the shelf prospectus filed by the company with the Securities and Exchange Commission. PPL Corporation  intends to utilize the net proceeds of the issue, including proceeds from sale to Forward Counterparties, to meet its short-term liabilities, contribute capital to its subsidiaries and for general company purposes.

The company from time to time issues shares and utilizes the proceeds to meet its financial obligation. In April 2011, the company issued 92 million shares at a price of $25.30 per share and the net proceeds of $2.3 billion were used to repay a portion of its Bridge term loan. The Bridge loan was utilized by the company to fund an acquisition.

PPL Corporation ensures a steady growth in shareholder return via regular and incremental dividend payments. The 2011 annual dividend rate of $1.40 per share was hiked by another 4 cents to come to the 2012 rate of $1.44 a share, a testament to the financial well-being of the company.

The company looks for funds because of its active acquisition policy and investment in infrastructure. We believe the cash generated internally as well as the issue of shares helps PPL Corp. to tide over its financial requirements.

Based in Allentown, Pennsylvania, PPL Corp. generates and delivers electricity and natural gas to nearly 5.2 million consumers in the United States and United Kingdom. The company retains a Zacks #3 Rank, which translates into a short-term Hold rating. The competitors of the company are Exelon Corp. (EXC) and FirstEnergy Corp. (FE)

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