Wednesday June 17, 07:22 PM
UPDATE 2-Iberdrola says cash call to help debt reduction
MADRID, June 17 (Reuters) - Iberdrola (Madrid: IBE.MC - news) 's 1.35 billion euro ($1.87 billion) share issue will help cut its net debt to 25-26 billion euros from 32 billion by the end of 2009, the Spanish utility's finance director said on Wednesday.
Iberdrola hiked capital earlier in the day by 5 percent, or 250 million shares priced at 5.30 euros each. The shares were placed with institutional investors including some shareholders, Jorge Sainz said during a conference call.
Iberdrola's shares closed down 6.09 percent at 5.55 euros on the news, but still traded at a premium to the new shares.
The CFO said Iberdrola expected to receive about 2.4 billion euros from state plans to pay electricity companies pending debt from shortfalls in fixed tariffs known as the tariff deficit.
Iberdrola reiterated forecasts it would sell 2.5 billion euros of assets in 2009, 850 million of which have already been sold.
The company also plans to limit capital expenditure to 4.2 billion euros.
Holders of the new shares will not be entitled to Iberdrola's 0.184 euro-per-share dividend due on July 1, which means that the shares were placed at a 13.8 percent discount to Iberdrola's closing price cum-dividend on Tuesday.
Sainz said the share sale was a one off and neither Iberdrola nor its Iberdrola Renovables renewable energy unit would need to surprise markets with further share issues for the time being.
($1=.7214 Euro)
(Reporting by Jonathan Gleave; Editing by Jon Loades-Carter)
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