Columbia Pipeline Group, Inc. (CPGX) (“CPG”) today announced the closing of its public offering of 71.5 million shares of common stock at a public offering price of $17.50 per share. In addition to the 71.5 million shares of common stock issued and sold at closing, 10.725 million shares of common stock were issued and sold at closing pursuant to the full exercise of the underwriters’ option to purchase additional shares of common stock. The net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses payable by CPG, were approximately $1.4 billion.
“CPG’s successful equity offering eliminates the need for additional equity capital until 2017 and gives us the financial flexibility to be opportunistic in raising equity as we go forward and execute our business plan,” said CPG Chairman and Chief Executive Officer Robert C. Skaggs, Jr. Skaggs also reaffirmed CPG’s 2015 EBITDA outlook of $680 million as well as 20 percent average annual EBITDA growth through 2020. Also reaffirmed are both CPG and Columbia Pipeline Partners LP’s (CPPL) (“CPPL”) previously announced average annual dividend and distribution growth rates through 2020 of 15 and 20 percent, respectively.
CPG plans to use the net proceeds from the offering, together with cash flow from operations and available borrowings under its revolving credit facilities, for general corporate purposes, including to fully fund, directly or indirectly, the 2016 cash capital expenditure requirements of its subsidiaries. In addition, CPG may make an investment in, or participate in other funding arrangements with, CPPL, consistent with CPG’s plans to grow the partnership. Pending such use, the net proceeds from the offering will be used to fully repay amounts outstanding under CPG’s revolving credit facility and outstanding amounts under CPG’s commercial paper program, with the remainder to be held as cash or invested in short term securities, or a combination of both.
Skaggs also noted that, while CPPL continues to represent the preferred long-term source of equity, the offering at CPGX was the optimal means by which to manage CPG’s capital needs in a difficult capital market environment.
“The fundamentals of our core business and our growth strategy remain squarely on track, and today’s successful equity offering allows the team to maintain its singular focus on the flawless execution of our business plan, including delivering our deep inventory of transformational investment opportunities on time and on budget. The completion of that backlog is expected to result in a tripling of the net investment of the company by 2020,” said Skaggs.
About Columbia Pipeline Group, Inc.
Columbia Pipeline Group, Inc. operates approximately 15,000 miles of strategically located interstate pipeline, gathering and processing assets extending from New York to the Gulf of Mexico, including an extensive footprint in the Marcellus and Utica shale production areas. Columbia Pipeline Group, Inc. also operates one of the nation’s largest underground natural gas storage systems. Columbia Pipeline Group, Inc. is listed on the NYSE under the ticker symbol CPGX.
