Sempra Energy has announced that it has priced its concurrent offerings (the equity offerings) of 23 364 486 shares of its common stock in connection with the forward sale agreements described below at US$107 per share and 15 000 000 shares of its 6% Mandatory Convertible Preferred Stock, Series A, at US$100 per share, each in a separate registered public offering. The equity offerings are expected to close on or about 9 January 2018, subject to customary closing conditions. In addition, the underwriters in the respective equity offerings have been granted the option to purchase directly from Sempra Energy up to an additional 3 504 672 shares of its common stock and up to an additional 2 250 000 shares of its Mandatory Convertible Preferred Stock.
These offerings are being made by means of separate prospectus supplements and are not contingent on each other or upon the consummation of Sempra Energy's pending acquisition (the merger) of Energy Future Holdings Corp. (EFH), including EFH's indirect, approximately 80% ownership of Oncor Electric Delivery Company LLC (Oncor).
The net proceeds from the Mandatory Convertible Preferred Stock offering will be approximately US$1.47 billion, after deducting the underwriting discount, but before deducting estimated offering expenses payable by Sempra Energy. Sempra Energy expects to use the net proceeds from the Mandatory Convertible Preferred Stock offering and the related sale of shares of its common stock pursuant to the forward sale agreements referred to below, together with the net proceeds from planned future debt financings, which may include the issuance of its debt securities, commercial paper supported by its revolving credit facilities and borrowings under its revolving credit facilities, to finance the merger and related costs and expenses or, in the case of any proceeds received from settlements under the forward sale agreements that occur after the closing of the proposed merger, to repay indebtedness incurred to finance a portion of the cost of the merger and related costs and expenses. If for any reason the merger is not completed on or prior to 1 December 2018, or the related merger agreement is terminated on or prior to that date, then Sempra Energy expects to use the net proceeds from the equity offerings for general corporate purposes, which may include, in Sempra Energy's sole discretion, the voluntary redemption of the Mandatory Convertible Preferred Stock, debt repayment, including repayment of commercial paper, capital expenditures, investments and possibly repurchases of its common stock at the discretion of its board of directors.
Morgan Stanley, RBC Capital Markets and Barclays are acting as joint bookrunners of the equity offerings and representatives of the underwriters.
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