PORT HURON, Mich., March 8 /PRNewswire-FirstCall/ -- SEMCO ENERGY, Inc.
(NYSE: SEN) announced today that it has reached an agreement with an affiliate
of k1 Ventures Ltd. to repurchase all of the outstanding and issued shares
(52,542.94) of SEMCO's 6% Series B Convertible Preference Stock held by the
affiliate. As part of the transaction, SEMCO will also repurchase from the k1
affiliate warrants to purchase 905,565 shares of SEMCO's common stock. The
aggregate purchase price under the agreement is $60 million, plus accrued
dividends if the closing occurs after March 19, 2005.
The Series B Convertible Preference Stock and warrants were initially
issued by SEMCO and acquired by the k1 affiliate during the first half of
2004. Additional shares of the 6% Series Convertible Preference Stock
currently outstanding were issued as "payment-in-kind" dividends during the
period the stock was outstanding. The repurchase is a result of difficulties
encountered by the parties in meeting their agreed deadline for a decision of
the Regulatory Commission of Alaska with respect to the investment by the k1
affiliate. The agreement to repurchase the Series B Preference Stock and
warrants contains a termination date of April 15, 2005.
The repurchase will be funded from proceeds from the proposed sale of a
new series of convertible preferred stock.
SEMCO intends to offer, subject to market and other conditions, $60
million of a new issue of convertible preferred stock. The offering will be
conducted pursuant to Rule 144A under the Securities Act of 1933 (the "Act")
to qualified institutional buyers and to certain non-U.S. persons in offshore
transactions pursuant to Regulation S under the Act. The preferred stock will
be convertible into shares of SEMCO common stock.
SEMCO expects to grant the initial purchasers of the convertible preferred
stock a 30-day option to purchase up to an additional $5 million of
convertible preferred stock in connection with the offering.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities. These securities have not been
registered under the Act or any state securities laws, and unless so
registered, may not be offered or sold in the United States except pursuant to
an exemption from the registration requirements of the Act and applicable
SEMCO ENERGY, Inc. distributes natural gas to approximately 398,000
customers combined in Michigan, as SEMCO ENERGY GAS COMPANY, and in Alaska, as
ENSTAR Natural Gas Company. It also owns and operates businesses involved in
propane distribution, intrastate pipelines and natural gas storage in various
regions of the United States.
The following is a "Safe-Harbor" statement under the Private Securities
Litigation Reform Act of 1995. This release contains forward-looking
statements that involve risks and uncertainties. Statements that are not
historic facts, including statements about the Company's outlook, beliefs,
plans, goals and expectations, are forward-looking statements. Factors that
may impact forward-looking statements include, but are not limited to, the
effects of weather, the economic climate, competition, commodity prices,
changing conditions in the capital markets, the Company's ability to complete
the offering in a timely manner on commercially acceptable terms, regulatory
approval processes, success in obtaining new business, success in defending
claims against the Company, and other risks detailed from time to time in the
Company's Securities and Exchange Commission filings.
SOURCE SEMCO ENERGY, Inc.
/CONTACT: Analysts Contact: Thomas Connelly, Director Treasury and
Investor Relations, +1-248-458-6163, or Media Contact: Timothy Lubbers,
Director of Marketing and Corporate Communications, +1-810-887-4208, both of
SEMCO ENERGY, Inc./
/Web site: http://www.semcoenergy.com /
CO: SEMCO ENERGY, Inc.
IN: OIL UTI
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8231 03/08/2005 22:44 EST http://www.prnewswire.com