PPL Corporation (PPL) said it has completed the permanent financing for the acquisition of the former Central Networks electricity distribution companies in the United Kingdom. The said acquisition was completed on April 03, 2011 and was financed through a syndicated bridge facility and a combination of common stock, equity units and debt.
The acquired companies are operated by PPL's Western Power Distribution (WPD) under the names WPD East Midlands and WPD West Midlands.
As a part of PPL’s permanent financing, WPD East Midlands and WPD West Midlands have together issued GBP 1.4 billion of corporate bonds, comprising GBP 600 million of WPD East Midlands’ 5.25% notes due 2023 and GBP 800 million of WPD West Midlands’ 5.75% notes due 2032. This comes as the final leg of financing for the U.K. assets.
PPL Corp. said the net proceeds from the issue will be used to repay the remaining GBP 1.2 billion for outstanding debt under the GBP 3.6 billion bridge loan facility used to fund the Central Networks acquisition, as well as to pre-fund capital expenditure work. PPL Corp. expects to fully repay the bridge loan on May 18, 2011.
Earlier, in April, PPL Corp. had paid off a portion of the bridge loan by selling common stock and equity units through public offerings. Under the offerings, the company sold 80 million shares of its common stock to the public priced at $25.30 per share and 17 million equity units at a price of $50 per unit.
Headquartered in Allentown, Pennsylvania, PPL Corp. is a diversified utility company, primarily generating energy from power plants, marketing wholesale or retail energy and providing electricity to customers. Along with its subsidiaries, the company provides regulated utility services to about 10 million customers in England, Wales, Pennsylvania, Kentucky, Virginia and Tennessee. It controls nearly 19,000 megawatts of regulated and competitive generating capacity in the United States. The company primarily competes with FirstEnergy Corp. (FE) and Exelon Corp. (EXC).
We maintain our ‘Neutral’ recommendation on PPL shares. PPL Corp. currently has a short term Zacks #3 Rank (Hold).
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