Fortis Completes UNS Energy Acquisition

Fortis Inc. announced yesterday that it has completed the transaction to acquire all of the outstanding shares of UNS Energy Corporation for an aggregate purchase price of approximately US $4.5 billion, including the assumption of approximately US$2.0 billion of debt.

UNS Energy is a vertically integrated utility services holding company, headquartered in Tucson, Arizona, engaged through three subsidiaries in the regulated electric generation and energy delivery business, primarily in the State of Arizona, serving approximately 657,000 electricity and gas customers.  UNS Energy's fiscal 2013 operating revenues totaled approximately US$1.5 billion and, as at June 30, 2014, UNS Energy had total assets of approximately US$4.5 billion.

Final Instalment Date for Debentures Represented by Instalment Receipts Fortis (FTS.TO) issued today the final instalment notice (the "Final Instalment Notice") in respect of its 4% convertible unsecured subordinated debentures ("Debentures") represented by instalment receipts ("Instalment Receipts").  The Final Instalment Notice provides that, among other things: 

(i) payment of the final instalment ($667 per $1,000 principal amount of Debentures) is due by October 27, 2014 (the "Final Instalment Date");

(ii) holders of Debentures will receive accrued and unpaid interest of $6.2637 per $1,000 principal amount of Debentures;

(iii) holders of Debentures who have paid the final instalment on or before the Final Instalment Date will also receive a make-whole payment of $8.1473 per $1,000 principal amount of Debentures, representing the interest that would have accrued from the day following the Final Instalment Date to and including January 9, 2015; and
 

(iv) concurrently with or at any time after the Final Instalment Date, holders of fully paid Debentures will have the right to convert their Debentures into Fortis common shares at a conversion price of $30.72 per common share. Fortis will issue up to 58,593,750 common shares on conversion of the outstanding Debentures.

On the day following the Final Instalment Date, the interest rate payable on the Debentures will fall to an annual rate of 0% and interest will cease to accrue on the Debentures.  Fortis expects the Instalment Receipts to be delisted from the Toronto Stock Exchange (the "TSX") on or about the Final Instalment Date.  The Debentures are not and will not be listed on the TSX.