Calgary-based TransCanada Corporation (TSX: T.TRP, Stock Forum) reported after Monday’s market close that it has entered into an agreement with a syndicate of underwriters who have agreed to purchase 30.5 million common shares from TransCanada and sell them to the public.
The company, which focuses on natural gas transmission and power services says the purchase price of $33.00 per common share will result in gross proceeds of approximately $1 billion. The net proceeds of the offering used to partially fund the company’s capital projects, for general corporate purposes and to repay short-term debts, says TransCanada.
On the TransCanada Bullboard Tuesday, posters commented on the news, including nambu who said: “...just me or does this feel a bit dilutive? And perhaps a tad ill-timed. So be it. Whatever they're lining up to swallow I hope its a sweet deal in this market and highly accretive for us longs. At a $33 issue price there should be some churn but dividend over 4.5% at those prices harder to resist[sic]”
marpincan added: “I think they are raising cash to weather the storm and keep there long term projects on track. We are in the middle of a credit crunch and so capital is hard to come by. Hence the lousy price![sic]”
Shares of TransCanada fell 4.9% to $32.83 Tuesday.
