New shares in EDP can only be subscribed to by institutional investors. Banks are already advancing with the operation that should be concluded on March 5.
EDP Renováveis will now proceed with a capital increase to finance its expansion in the coming years. In a statement sent to the Portuguese Securities Market Commission (CMVM), the company led by Miguel Stilwell announced it intends to raise 1.5 billion euros from institutional investors.
A few days after revealing that a capital increase of between 1.5 billion and 2 billion euros was being considered with institutional investors, the CEO of EDP Renováveis will now start the operation. Considering the information present in the Strategic Update, this was regarded as the “appropriate moment” for this operation.
The value of the capital increase is at the lower limit foreseen by Stilwell. In order to partially fund its investment plan of around 24 billion in energy transition and EDP Renováveis investment plan of about 19 billion to implement 20 GW of renewables by 2025, the company “is planning a capital increase of around 1.5 billion,” according to the statement sent to the market regulator.
In order to speed up this process, “Citigroup Global Markets Europe AG (“Citi”) and Morgan Stanley Europe SE (“Morgan Stanley”) have been mandated by EDPR to launch an offering of EDPR shares via an accelerated bookbuild targeting gross proceeds of 1.5 billion euros.” This operation, which is already underway, will be aimed “exclusively at professional investors.”
These banks will thus collect intentions to buy new shares in the company from investors. “Following the completion of the accelerated bookbulding, EDPR will determine and announce the issue price and the final gross proceeds.”
“Following the announcement of the issue price and final gross proceeds of the accelerated bookbulding, investors are expected to be in receipt of EDPR allocated shares on or around March 5th, 2021.” the company says. “The investors will be entitled to all economic and voting rights inherent to the shares from that date onwards.”
Both EDP and EDP Renováveis “will be subject to a lock-up of 180 days from delivery of the new shares under the Capital Increase, subject to market standard exemptions,” the statement adds. In other words, for half a year, neither EDP nor EDP Renováveis will be able to sell the securities.