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The Board of IBERDROLA unanimously approves financing the acquisition of Energy East via an accelerated capital increase

  • Board backs, also unanimously, the financing model for the new transaction in the United States
  • The operation, which amounts to 85 million shares, representing approximately 7 % of existing capital, will allow the Company to strengthen balance sheet funds and its financial situation, while broadening the shareholder base
  • Following completion of the integration with ScottishPower and the announcement of the acquisition of Energy East, the Board praised the performance of IBERDROLA over the past few years, describing its growth and international penetration as “highly satisfactory”

IBERDROLA will finance the acquisition of the U.S. company Energy East via an accelerated and privately placed capital increase (Accelerated Bookbuilt Offer, ABO). The decision was unanimously approved by the Board.

This placement, through which 85 million new shares will be issued, representing approximately 7 % of existing capital, will enable the Company to reinforce shareholder funds and its solid financial situation while broadening the shareholder base.

IBERDROLA has appointed ABN AMRO ROTHSCHILD, CREDIT SUISSE and JP MORGAN as Joint Global Co-ordinators and Bookrunners to the transaction.

The proceeds of this capital increase will be used to finance the acquisition of Energy East, which was approved unanimously by the Board on Monday. The operation represents a renewed vote of confidence in the management of IBERDROLA and its Chairman Ignacio Galán following the successful completion of the acquisition of ScottishPower.

The Board praised the performance of IBERDROLA over the past few years, describing its growth and international penetration as “highly satisfactory”. It highlighted, among other fruits of the strategy that has been implemented since 2001, value creation, shareholder returns, job stability and professional developments for employees, quality and security of supply to customers and diversification of risk.

Finally, in the light of the achievements of the Company and projects being developed in the near future, which have transformed IBERDROLA into “one of the world’s leading energy companies”, Board directors, aware of the importance of the work carried out, unanimously expressed their “commitment to the Company’s progress” and their “unconditional support for the management team and the leadership of the Chairman.”

The new shares, which are not eligible for the final 2006 dividend (€ 0.593per share to be paid on July 2nd, are expected to start trading on the stock exchange on June 29th with a different ISIN code. The two share types will be unified on July 2nd, when the new shares will have the same economic rights as the old shares.

Improvements in Corporate Governance

The Board also approved changes in IBERDROLA’s Auditing and Compliance Committee, whereby member Sebastián Battaner becomes Chairman, the current chairman Ricardo Álvarez Isasi becomes Secretary, and the current Secretary, Julio de Miguel Aynat, becomes a member.

The Board also resolved to modify the IBERDROLA Group’s Code of Professional Conduct, to align it with other corporate governance standards used in the company, which have been adapted to the new recommendations issued by Spain’s National Securities Market Commission (CNMV).

Among the changes are the inclusion of a vision statement –to be the preferred company on the basis of commitment to value creation, quality of life and protection of the environment— and corporate values (ethics and corporate responsibility, business results, respect for the environment, trust and a sense of belonging to the IBERDROLA Group).

Other new clauses in the Code of Professional Conduct refer to the commitment to human and labour rights, the principle of non-discrimination and equal opportunity for all employees, the reconciling of work and family life, the concept and treatment of insider information, corporate social responsibility, and sustainable development.

The Board also approved the amendment of the Regulations of the Board of Directors to establish the mandatory retirement age for all board members at 70 years.



This communication does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities. The shares of Iberdrola S.A. may not be offered or sold in the United States except pursuant to an effective registration statement under the Securities Act or pursuant to a valid exemption from registration.

The release, publication or distribution of this communication in certain jurisdictions may be restricted by law and therefore persons in any such jurisdictions into which this communication is released, published or distributed should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction.


This communication contains forward-looking information and statements about Iberdrola, S.A. and otherwise, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions. 

Although Iberdrola, S.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Iberdrola, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Iberdrola, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the public documents sent by Iberdrola, S.A. to the Comisión Nacional del Mercado de Valores.

Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Iberdrola, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Iberdrola, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based on information available to Iberdrola, S.A. on the date hereof. Except as required by applicable law, Iberdrola, S.A. does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In connection with the proposed transaction involving Energy East Corporation (the “Proposed Transaction”), Iberdrola, S.A. may be required to file relevant documents with the U.S. Securities and Exchange Commission (the “SEC”). Such documents, however, are not currently available. INVESTORS ARE URGED TO READ ANY DOCUMENTS FILED OR TO BE FILED WITH THE SEC REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain a free copy of such documents (when available) at the SEC’s website at Copies of such documents may also be obtained from Iberdrola, S.A., without charge, once they are filed with the SEC by directing a request to Relaciones con Inversores, Iberdrola, S.A., Tomás Redondo 1, 28033 Madrid.

In connection with the Proposed Transaction, Energy East Corporation will file a proxy statement with the SEC. Before making any voting or investment decision, investors and security holders of Energy East Corporation are urged to carefully read the entire proxy statement, when it becomes available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the Proposed Transaction. A definitive proxy statement will be sent to the shareholders of Energy East Corporation in connection with the Proposed Transaction. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Energy East Corporation at the SEC’s web site at The proxy statement and such other documents may also be obtained for free from Energy East Corporation by directing a request to Energy East, 52 Farm View Drive, New Gloucester, ME 04260, Attention Marc Siwak.

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