/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES./
Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange under the trading symbol "CUP.U".
GRAND CAYMAN, Cayman Islands, Aug. 24, 2020 /CNW/ -
Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the
Company") announces that it will be making a rights offering (the
"Offering") under which holders (the "Shareholders") of Class A
Ordinary shares (the "Class A Ordinary Shares") of the Company as
at the close of business on the record date of September 1, 2020 (the "Record Date") will be
issued rights (the "Rights") to subscribe for Class A Ordinary
Shares on the basis of one Right for each Class A Ordinary Share
held. The Offering will be made in the Cayman Islands and in all of the provinces of
Canada (the "Eligible
Jurisdictions").
Pursuant to the Offering, Shareholders will receive one Right
for each Class A Ordinary Share held. Each Right entitles the
holder thereto to subscribe for 0.10 of a Class A Ordinary Share
and every 10 Rights entitle the holder thereto to subscribe for one
Class A Ordinary Share upon payment of the subscription price of
US$14.24 (the "Subscription Price")
per Class A Ordinary Share (the "Basic Subscription Privilege") on
or before 4:00 p.m. (Toronto time) on October 26, 2020 (the
"Expiry Time"), after which time unexercised Rights will be void
and of no value. No fractional Class A Ordinary Shares will be
issued under the Offering.
Shareholders who fully exercise their Rights in accordance
with their Basic Subscription Privilege will also be entitled
to subscribe for additional Class A Ordinary Shares in the
Offering, if available as a result of unexercised Rights prior to
the Expiry Time (as defined below), subject to
certain limitations set out in the rights offering circular of
the Company (the "Circular").
The Rights are expected to trade on the TSX under
the trading symbol "CUP.RT.U" commencing on August 31, 2020 until 12:00 p.m. (Toronto time) on October 26, 2020. The TSX has conditionally
approved the listing of the Class A Ordinary Shares issuable upon
exercise of the Rights, subject to the Company fulfilling all of
the listing requirements of the TSX.
There are currently 33,593,624 Class A Ordinary Shares issued
and outstanding. Assuming all of the Rights issued under the
Offering are validly exercised, the Company expects to raise gross
proceeds of US$ 47.8 million from the
Offering. The Company intends to use the net proceeds of the
Offering to refinance existing debt and for general corporate
purposes.
The rights offering notice (the "Notice") and
rights certificate will be mailed to each registered
Shareholder as at the Record Date that is resident in the
Eligible Jurisdictions. Registered Shareholders who wish to
exercise their Rights must deliver or mail the
completed rights certificate, together with applicable funds,
to the rights agent, AST Trust Company (Canada) or Scotiabank & Trust (Cayman)
Ltd., as applicable, on or before the Expiry Time.
Shareholders resident in the Eligible Jurisdictions who own their
Class A Ordinary Shares through an intermediary, such as
a bank, trust company, securities dealer or broker, will receive
materials and instructions from their intermediary. Subject to
the detailed provisions of the Circular, Rights will not be
delivered to, nor will they be exercisable by, persons resident
outside of the Eligible Jurisdictions unless such holders can
establish that the transaction is exempt under applicable
legislation. Rather, such Rights may be sold on their behalf. If
you are a Shareholder and reside outside of the Cayman Islands or the provinces of
Canada, please review the Notice,
Circular and notice to U.S. Shareholders or ineligible
Shareholders, as applicable, to determine your eligibility and the
process and timing requirements to receive and exercise your
Rights.
The Stand-By Commitment
In connection with the Offering, the Company has entered
into a stand-by purchase agreement dated the date hereof
(the "Stand-By Agreement") with Fortis Energy (Bermuda) Ltd., a wholly-owned subsidiary of
Fortis Inc. (the "Stand-By Purchaser"), the Company's
controlling Shareholder. The Stand-By Purchaser has
agreed, subject to certain terms and conditions, to purchase
from the Company, at the Subscription Price, all of the Class A
Ordinary Shares that are not otherwise subscribed for and purchased
under the Offering by holders of Rights so that the maximum number
of Class A Ordinary Shares that may be issued in connection with
the Offering will have been issued (the "Stand-By Commitment").
As of the date hereof, FEBL owns 58% of the issued and
outstanding Class A Ordinary Shares on a non-diluted basis.
Following completion of the Offering, assuming the Offering is
fully subscribed, FEBL will own 58% of the issued and outstanding
Class A Ordinary Shares on a non-diluted basis.
There is no fee payable by the Company to FEBL in respect of the
Stand-By Commitment. The Company has agreed to pay the reasonable
fees and out-of-pocket expenses of FEBL in connection with the
negotiation and execution of the Stand-By Agreement.
Additional Information
The Rights and the Class A Ordinary Shares issuable upon
exercise of the Rights have not been, and will not be, registered
under the United States Securities Act of 1933, as amended, and
accordingly, the Rights and the Class A Ordinary Shares are not
being publicly offered for sale in the
"United States" or to "U.S. persons" (as such terms are
defined in Regulation S under the United States Securities Act of
1933, as amended). This press release does not constitute an offer
to sell or the solicitation of an offer to buy the securities in
any jurisdiction. There shall be no sale of the securities in any
jurisdiction in which an offer to sell, a solicitation of an offer
to buy or a sale would be unlawful.
This release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities of the Company.
There shall be no offer or sale of these securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful.
About CUC
CUC provides electricity to Grand
Cayman, Cayman Islands,
under an Electricity Generation Licence expiring in 2039 and an
exclusive Electricity Transmission and Distribution Licence
expiring in 2028. Further information is available at
www.cuc-cayman.com.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking statements within
the meaning of applicable securities laws. Forward-looking
statements include statements that are predictive in nature, depend
upon future events or conditions, or include words such as
"expects", "anticipates", "plans", "believes", "estimates",
"intends", "targets", "projects", "forecasts", "schedules", or
negative versions thereof and other similar expressions, or future
or conditional verbs such as "may", "will", "should", "would" and
"could". The forward-looking statements contained in this news
release include, but are not limited to, the Company's intention to
undertake the Offering; the terms of the Offering, the terms of the
Stand-By Agreement; the intended use of proceeds; and the listing
of the Class A Ordinary Shares issuable upon exercise of the Rights
on the TSX. Forward-looking statements are based on
underlying assumptions and management's beliefs, estimates and
opinions, and are subject to certain risks and uncertainties
surrounding future expectations generally that may cause actual
results to vary from plans, targets and estimates. Such risks and
uncertainties include but are not limited to operational, general
economic, market and business conditions, regulatory developments
and weather conditions. CUC cautions readers that actual results
may vary significantly from those expected should certain risks or
uncertainties materialize or should underlying assumptions prove
incorrect. Forward-looking statements are provided for the purpose
of providing information about management's current expectations
and plans relating to the future. Readers are cautioned that such
information may not be appropriate for other purposes. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise except as required by
law.
SOURCE Caribbean Utilities Company, Ltd.