SCANA Corporation (NYSE:SCG), a producer and marketer of electricity, will be added to the Standard & Poor’s 500 Index after the market closes on December 31st. To celebrate the occasion, SCANA is offering 2 million new, registered shares. The company plans to use the funds to finance its capital expenditures and for general corporate purposes. Morgan Stanley & Company, a subsidiary of JP Morgan Chase & Company (NYSE:JPM), is the book-runner.
This is a pretty shrewd move. The offering has not been priced yet, but the stock is trading around $35/share with about 117 million shares outstanding. The new offering doesn’t dilute existing shares much, and provides a nice fund to bolster earnings next year by limiting the amount of cash or borrowing the company will have to use to pay for capex.
The state’s energy regulators have tied annual rate increases to improved infrastructure, and SCANA has taken advantage of the ruling. The company benefited from a rate increase in November that sets SCANA’s allowed return at 10.6% for one of its South Carolina operations, and 10.25% for another.
The stock is trading down about 1% this morning, about 20% off its 52-week high. SCANA reiterated its full-year guidance in October, and expects EPS of $2.90-$3.05 per share for 2008.