PORT HURON, Mich., March 9 /PRNewswire-FirstCall/ -- SEMCO ENERGY, Inc.
(NYSE: SEN) announced today that it has priced an offering of 325,000 shares
of its 5% Series B Convertible Cumulative Preferred Stock, generating gross
proceeds to the Company of $65 million, to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933 (the "Act") and to
persons in offshore transactions in reliance on Regulation S under the Act.
The sale of the preferred stock to the initial purchasers is expected to close
on March 15, 2005.
The preferred stock is convertible at the holder's option at any time at
an initial conversion rate of 26.1438 shares of SEMCO'S common stock per $200
liquidation preference, which represents an initial conversion price of
approximately $7.65 per share of common stock.
SEMCO may redeem the preferred stock for cash after February 20, 2010, at
an initial redemption price equal to 100% of the liquidation preference, plus
accumulated and unpaid dividends to the date of redemption. The preferred
stock is mandatorily redeemable for cash on February 20, 2015, at a redemption
price equal to 100% of the liquidation preference, plus accumulated and unpaid
dividends to the date of redemption.
SEMCO also has granted the initial purchasers a 30-day option to purchase
up to an additional 25,000 shares of preferred stock in connection with the
SEMCO will use the proceeds of this offering to repurchase from an
affiliate of k1 Ventures Ltd. all of the outstanding and issued shares
(52,542.94) of SEMCO's 6% Series B Convertible Preference Stock and warrants
to purchase 905,565 shares of SEMCO's common stock. The aggregate purchase
price under the repurchase agreement is $60 million, plus accrued dividends if
the closing occurs after March 19, 2005. Additional proceeds, and to the
extent that the initial purchasers exercise their option to purchase the
additional shares, will be used to repurchase, redeem, repay or retire junior
capital and other existing subordinated indebtedness or for general corporate
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
state laws. The preferred stock will be eligible for trading under Rule 144A
of the Act. Purchasers of the preferred stock are being granted rights to
register resales of the preferred stock and underlying common stock under the
SEMCO ENERGY, Inc. distributes natural gas to more than 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, 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, Thomas Connelly, Director of Treasury & Investor
Relations, +1-248-458-6163, or Media, Timothy Lubbers, Director of Marketing &
Corporate Communications, +1-810-877-4208, both of SEMCO ENERGY, Inc. /
/Web site: http://www.semcoenergy.com /
CO: SEMCO ENERGY, Inc.
IN: OIL UTI
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9269 03/09/2005 21:21 EST http://www.prnewswire.com