Avangrid to raise USD 4bn in private placement

US sustainable energy company Avangrid Inc (NYSE:AGR) will privately place USD 4 billion (EUR 3.31bn) of common stock with its majority owner, Spanish utility group Iberdrola SA (BME:IBE), and the Qatar Investment Authority (QIA), it said in a regulatory filing on Wednesday.

Qatar’s sovereign wealth fund will buy USD 740 million worth of shares via a wholly-owned subsidiary Hyde Member LLC, paying USD 51.40 apiece, Avangrid stock’s closing price on May 11.

Iberdrola, which controls Avangrid with an 81.5% stake, will purchase USD 3.26 billion of common stock proportionally to its current holding.

The transaction is expected to close on May 18, Avangrid said. In a separate filing, Iberdrola added that it will maintain its 81.5% ownership in the US subsidiary, while QIA, as a new shareholder, will take a stake of around 3.7% in Avangrid. QIA also holds 8.71% of Iberdrola’s share capital.

Avangrid will use the proceeds to bankroll its proposed merger with US utilities holding PNM Resources Inc (NYSE:PNM), which is advancing through the regulatory approval process, pay off a USD-3-billion loan to Iberdrola and fund its investment plan.

The investment plan will be focused on projects in the power grid segment and renewable energy, including offshore wind development in the US, Iberdrola said.

(USD 1.0 = EUR 0.828)

Choose your newsletter by Renewables Now. Join for free!