8-KMaterial AgreementsRegulation FDExhibits & Filings

Duke Energy CORP 8-K Report, Material Agreement (Jan 28, 2021)

Filed January 28, 2021For Securities:DUKDUKBDUK-PA

Summary

Duke Energy Corporation announced a significant transaction on January 27, 2021, where its subsidiary, Duke Energy Indiana, LLC (DEI), entered into an agreement with an affiliate of GIC Private Limited, Singapore's sovereign wealth fund. GIC will acquire a 19.9% interest in DEI Holdco for $2.05 billion. This investment is structured in two closings, with GIC acquiring newly issued membership interests in DEI Holdco, which will hold 100% of Duke Energy Indiana. The proceeds from this minority stake sale are earmarked to fund Duke Energy's increased capital plan, signaling a strategic move to enhance growth and operational investments. This transaction is crucial for Duke Energy as it supports an upward revision to their long-term adjusted Earnings Per Share (EPS) growth rate target to 5-7% through 2025, from the previous 4-6% range. This revised outlook is based on the midpoint of their 2021 adjusted EPS guidance of $5.00 to $5.30. The partnership with GIC, an experienced infrastructure investor, is expected to provide capital to fuel Duke Energy's strategic initiatives and support its financial objectives.

Key Highlights

  • 1Duke Energy Indiana entered a definitive agreement for GIC Private Limited to acquire a 19.9% interest in Duke Energy Indiana, LLC (DEI Holdco) for $2.05 billion.
  • 2The transaction involves the issuance of new membership interests in DEI Holdco to GIC, structured in two closings.
  • 3Proceeds from the sale will fund Duke Energy's increased capital plan, expected to be between $58 and $60 billion.
  • 4Duke Energy raised its long-term adjusted EPS growth rate target to 5-7% through 2025, up from the previous 4-6% range.
  • 5The company issued 2021 adjusted EPS guidance of $5.00 to $5.30 per share.
  • 6Regulatory approvals, including from FERC and CFIUS, are required before the closings can occur.
  • 7The partnership with GIC aims to bolster Duke Energy's growth potential and support its strategic investments.

Frequently Asked Questions

The primary purpose is to raise capital through the sale of a minority stake in Duke Energy Indiana to fund the company's increased capital expenditures and support its growth initiatives. It also allows Duke Energy to revise its long-term EPS growth targets upwards.

GIC Private Limited is Singapore's sovereign wealth fund and an experienced investor in U.S. infrastructure. They are investing to gain a 19.9% interest in Duke Energy Indiana, likely attracted by the stable, regulated utility asset and the potential for future growth.

Shareholders can expect improved growth prospects, with Duke Energy raising its long-term adjusted EPS growth rate guidance. The increased capital plan, funded by this transaction, is intended to drive future earnings and potentially enhance shareholder returns.

Yes, the transaction is subject to customary closing conditions, including receipt of approval from the Federal Energy Regulatory Commission (FERC) and completion of a review by the Committee on Foreign Investments in the United States (CFIUS).