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Investing.com -- OGE Energy Corp. (NYSE:OGE) stock fell 3% in after-hours trading Thursday following the company’s announcement of a $345 million public offering of common stock.
The Oklahoma-based utility company said it would directly issue approximately $172.5 million of shares to underwriters, while the remaining $172.5 million would come from shares borrowed from third parties and sold to underwriters in connection with forward sale agreements. OGE Energy also plans to grant underwriters an option to purchase up to an additional $51.75 million of common stock.
Morgan Stanley and J.P. Morgan are serving as joint lead bookrunners for the offering. The underwriters may offer the shares through various channels including the New York Stock Exchange and over-the-counter markets at prevailing or negotiated prices.
The company intends to use the net proceeds from directly sold shares to fund capital expenditures, including the Horseshoe Lake generating units 13 and 14 and the Ft. Smith to Muskogee Transmission line. Funds will also support general corporate purposes and debt repayment or refinancing.
As part of the transaction, OGE Energy will enter into forward sale agreements with Morgan Stanley & Co. LLC and JPMorgan Chase Bank, with settlement expected within 18 months following the offering’s completion. The company retains options for cash settlement or net share settlement for all or portions of its obligations under these agreements.
OGE Energy will not initially receive proceeds from shares sold by forward sellers to underwriters but intends to use any net proceeds received upon settlement of the forward sale agreements for the same purposes as its directly sold shares.
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