Iberdrola injects 2,700 million euros into its US subsidiary

May 13 (Reuters) – The Spanish energy group Iberdrola will subscribe 81.5% of a capital increase of Avangrid, which will mean a contribution of 3,260 million dollars (about 2,700 million euros) with which to finance the growth of its US affiliate.

A portion of the proceeds from the capital increase will finance Avangrid’s proposed merger with PNM Resources and will pay off a loan that Iberdrola provided to the subsidiary for an amount of $ 3 billion.

Another part of the funds will be used to finance Avangrid’s investment plan, financing its announced future growth with more than 20,000 million dollars of organic investments until 2025, according to the Spanish company in a press release.

The capital increase will entail the issuance of a total of $ 4 billion ($ 3,308 million) in common shares in a private placement at $ 51.40 per share, the closing price on May 11, 2021.

The amount subscribed by Iberdrola corresponds to its current 81.5% stake in the company —which implies that it will not be diluted with the issuance of new shares—, while its partner Qatar Investment Authority (QIA) will subscribe the 740 million remaining dollars, acquiring approximately 3.7% of the common shares of Avangrid.

QIA is also a shareholder of Iberdrola, with 8.71% of the capital.

Iberdrola pointed out that Avangrid’s investment plan focuses “on regulated investments that generate predictable benefits and growing cash flows in network infrastructures, (…) as well as in renewable energies, contributing to the development of offshore wind energy in the United States. United, mainly, (…) and in onshore wind and photovoltaic projects “.

(Information by Tomás Cobos; edited by Darío Fernández)

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