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Bakun rights issue raised

Renewable energy company Pacific Hydro has announced a one-for-one rights issue to raise US$55.7M as a contribution towards the US$150M Bakun hydroelectric project in the Philippines. Pacific Hydro said it has received pre-committed support from its two largest shareholders, Development Australia Fund and American Electric Power Company’s Resources Pty, which have almost 55% of the combined ownership. Shareholders are being offered the rights at 95cents.

Pacific Hydro forecast that the project would help it achieve a substantial growth in earnings in 2000-1. It also claims that the rights issue would increase the capitalisation from around US$70M to US$125M.

The income stream from Bakun’s US$ denominated long term power purchase agreement with the Philippine government is expected to significantly boost earnings per share.

According to Pacific Hydro’s chairman Kingsley Culley, the completion of Bakun is another step in the company’s quest to maximise value for shareholders. Culley believes the raising will help the company to get noticed by a wider range of investors and will position it well for future growth.