Southern Co makes power play on gas

摘要

Southern co on Monday unveiled an US$8bn, all-cash acquisition of acl resources in what represents a long-term play on low-cost natural gas. While the tie-up, announced after negotiations over the "last several weeks", has strategic merits, the high price paid will stress the regulated utility's balance sheet and require sustained equity issuance. Southern plans to issue US$3bn of new equity through 2019, in addition to new debt funding around the time the deal is expected to close in the second half of 2016. The bulk of that equity would come through at-the-market sales and shares issued on reinvestments of dividends paid, though a mandatory convertible in the range of US$400m is possible towards the end of this year, management said in an analyst call.