ST. JOHN’S, N.L. – Fortis Inc. (TSX:FTS) is issuing more than 58 million common shares to holders of convertible debt that was issued to finance part of its US$4.3-billion acqusition of Arizona-based UNS Energy Corp.
The Newfoundland-based utility company said Tuesday that the stock represents most of the $1.8 billion in convertible debentures issued to pay for the UNS deal, which was announced last December.
Only about $11.2 million of the convertible debt remains outstanding and Fortis will delist its publicly traded installment receipts, which have been a proxy for the debentures’ underlying stock.
Fortis said that no further interest will accumulate or be paid on the unconverted debentures as of Tuesday.
Investors had until Oct. 27 to make the final installment payments on the debentures, giving them the right to swap the debt for common stock at a rate of $30.72 per share.
That was below the stock’s closing price of $35.75 on Monday.
Fortis operates utilities serving more than three million customers in Canada and in New York State and the Caribbean. It paid US$60.25 per share in cash for UNS Energy of Tuscon, Ariz., which serves about 654,000 electricity and gas customers.
