Summary
Xcel Energy Inc. (XEL) has entered into forward sale agreements with Citibank, N.A. for a total of 11,845,000 shares of its common stock. These agreements, initiated on October 30, 2019, and expanded on November 1, 2019, involve selling shares initially priced at $62.69, subject to adjustments. The company has the flexibility to settle these agreements through physical share issuance, net share settlement, or cash settlement, with settlement dates to be determined by Xcel Energy on or before December 31, 2020. This transaction is structured such that shares were borrowed from third parties and sold by Citigroup Global Markets Inc. (acting as Forward Seller and Underwriter) to the public. The forward sale agreements provide Xcel Energy with potential dilution in earnings per share if new shares are issued. Conversely, cash or net share settlements may involve repurchases, with potential financial implications depending on the stock's market value relative to the forward sale price. The filing also outlines specific circumstances under which Citibank, N.A. (as Forward Purchaser) could accelerate the settlement of these agreements.
Key Highlights
- 1Xcel Energy entered into forward sale agreements for 11,845,000 shares of common stock.
- 2The initial forward sale price is set at $62.69 per share, subject to daily adjustments.
- 3Settlement is expected by December 31, 2020, at Xcel Energy's discretion.
- 4Xcel Energy has flexibility in settlement methods: physical issuance, net share settlement, or cash settlement.
- 5Physical settlement or net share settlement could result in dilution of earnings per share.
- 6The Forward Purchaser (Citibank, N.A.) has the right to accelerate settlement under certain conditions, such as hedging difficulties, significant dividends, changes in ownership, extraordinary events (like mergers), or events of default.
- 7The shares were sold to the public via an underwriter (Citigroup Global Markets Inc.), with the shares initially borrowed from third parties.