Sempra Energy's IEnova Prices IPO
Sempra Energy (SRE) announced that its subsidiary Infraestructura Energetica Nova, S.A.B. de C.V. or IEnova has priced its private offering of about 91.04 million shares of Class II, Single Series, common stock at an initial offering price of 34.00 Mexican pesos per share, or about US$2.75.
Simultaneously, IEnova also priced its initial public offering registered in Mexico of about 98.62 million shares of common stock at the same initial offering price. Settlement of the offerings is expected to occur on Mar 27, 2013.
The initial purchasers in the private offering and the underwriters in the Mexican public offering have been granted a 30-day option to purchase up to an additional 28.45 million shares of common stock at the initial offering price, less the underwriting discount, to cover overallotments, if any.
The aggregate shares of common stock to be sold in the offerings represent about 16.85% of IEnova's outstanding ownership interest, and approximately 18.9% of IEnova's outstanding ownership interest if the 30-day overallotment option is exercised in full.
The company estimates the net proceeds of the offerings to be about 6.1 billion Mexican pesos or US$496 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by IEnova, and prior to any exercise of the 30-day overallotment option.
IEnova expects to use the net proceeds of the offerings primarily for general corporate purposes, including the funding of its current investments and ongoing expansion plans.
Based in San Diego, California, Sempra Energy, along with its subsidiaries, engages in the development of energy infrastructure, operation of utilities, and provision of energy-related products and services to its consumers. With a market cap of $18.30 billion, the company has 17,483 employees.
Sempra Energy ended 2012 on a strong note and remains on track to achieve compound annual earnings growth of 6% to 8%. The company has doubled its renewable energy generation portfolio and its success to win a bid to construct and own a $1 billion of natural gas pipeline in Mexico will surely help its cause.
The board of directors recently approved a 4.8% increase in the quarterly dividend rate to 63 cents. The increase reflects the underlying strength of the business and management’s inclination to improve shareholder value. Sempra Energy currently has a Zacks Rank #2 (Buy).
Besides Sempra Energy, other stocks in the industry that are currently performing well include the Zacks Rank #1 (Strong Buy) stock The Laclede Group Inc. (LG), and Zacks Rank #2 (Buy) stocks Atmos Energy Corporation (ATO) and Chesapeake Utilities Corporation (CPK).
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