CALGARY, AB, Aug. 31, 2020 /CNW/ - AltaGas Ltd. ("AltaGas")
(TSX: ALA) announced today that it does not intend to exercise its
right to redeem any or all of its currently outstanding Cumulative
Redeemable Five-Year Rate Reset Preferred Shares, Series A
(the "Series A Shares") (TSX: ALA.PR.A) or the
Cumulative Redeemable Floating Rate Preferred Shares, Series B (the
"Series B Shares") (TSX: ALA.PR.B) on September 30, 2020 (the "Conversion Date").
As a result, subject to certain conditions, the holders of the
Series A Shares have the right to convert all or part of their
Series A Shares on a one-for-one basis into Series B Shares on the
Conversion Date. Holders who do not exercise their right to convert
their Series A Shares into Series B Shares will, subject to
automatic conversion in the circumstances described below, retain
their Series A Shares.
In addition, on the Conversion Date the holders of the Series B
Shares have the right to convert all or part of their Series B
Shares on a one-for-one basis into Series A Shares. Holders who do
not exercise their right to convert their Series B Shares into
Series A Shares will, subject to automatic conversion in the
circumstances described below, retain their Series B Shares.
The foregoing conversion rights are subject to the conditions
that: (i) if AltaGas determines that after giving effect to all
conversions there would be less than 1,000,000 Series A Shares
outstanding after the Conversion Date, then all remaining Series A
Shares will automatically be converted into Series B Shares on a
one-for-one basis on the Conversion Date; and (ii) if AltaGas
determines that after giving effect to all conversions there would
be less than 1,000,000 Series B Shares outstanding after the
Conversion Date, then all remaining Series B Shares will
automatically be converted into Series A Shares on a one-for-one
basis on the Conversion Date. There are currently 5,511,220 Series
A Shares and 2,488,780 Series B Shares outstanding.
With respect to any Series A Shares that are outstanding after
the Conversion Date, holders shall be entitled to receive, as and
when declared by the Board of Directors of AltaGas, fixed
cumulative preferential cash dividends, payable quarterly. The new
annual dividend rate applicable to the Series A Shares for the
five-year period commencing on and including September 30, 2020 to, but excluding,
September 30, 2025 will be
3.060 percent, being equal to the sum of the five-year
Government of Canada bond yield
determined as of today plus 2.66 percent.
With respect to any Series B Shares that are outstanding after
the Conversion Date, holders shall be entitled to receive, as and
when declared by the Board of Directors of AltaGas, quarterly
floating rate cumulative preferential cash dividends. The dividend
rate applicable to the Series B Shares for the three-month floating
rate period commencing on and including September 30, 2020 to, but excluding,
December 31, 2020 will be 2.809
percent, being equal to the sum of the annual rate of interest for
the most recent auction of 90 day Government of Canada treasury bills plus 2.66 percent
(the "Floating Quarterly Dividend Rate"). The Floating Quarterly
Dividend Rate will be reset every quarter.
Beneficial holders of Series A Shares and Series B Shares who
wish to exercise their right of conversion should instruct their
broker or other nominee to exercise such right during the
conversion period, which runs from August
31, 2020 until 5:00 p.m.
(Toronto time) on September 15, 2020. It is recommended that this
be done well in advance of the deadline in order to provide the
broker or other intermediary with time to complete the necessary
steps. Any notices received after this deadline will not be
valid.
Subject to the terms and conditions of the Series A Shares and
Series B Shares and AltaGas' right to redeem such shares, holders
of the Series A Shares and the Series B Shares will have the
opportunity to convert their shares again on September 30, 2025, and every five years
thereafter as long as the Series A Shares and Series B Shares
remain outstanding.
AltaGas is a leading North American energy infrastructure
company that connects NGLs and natural gas to domestic and global
markets. AltaGas creates value by growing and optimizing its energy
infrastructure, including a focus on clean energy sources. For more
information visit: www.altagas.ca
This news release contains forward-looking statements. When
used in this news release, the words "may", "would", "could",
"will", "intend", "plan", "anticipate", "believe", "seek",
"propose", "estimate", "expect", and similar expressions, as they
relate to AltaGas or an affiliate of AltaGas, are intended to
identify forward-looking statements. In particular, this news
release contains forward-looking statements with respect to, among
other things, the payment of dividends, right to convert Series A
Shares and Series B Shares and on what terms and the timing and
manner of determination of the interest rates applicable in respect
thereof. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Such statements reflect AltaGas'
current views with respect to future events based on certain
material factors and assumptions and are subject to certain risks
and uncertainties, including without limitation, changes in market
competition, governmental or regulatory developments, general
economic conditions and other factors set out in AltaGas' public
disclosure documents. Many factors could cause AltaGas' actual
results, performance or achievements to vary from those described
in this news release, including without limitation those listed
above. These factors should not be construed as exhaustive. Should
one or more of these risks or uncertainties materialize, or should
assumptions underlying forward-looking statements prove incorrect,
actual results may vary materially from those described in this
news release as intended, planned, anticipated, believed, sought,
proposed, estimated or expected, and such forward-looking
statements included in, or incorporated by reference in this news
release, should not be unduly relied upon. Such statements speak
only as of the date of this news release. AltaGas does not intend,
and does not assume any obligation, to update these forward-looking
statements. The forward-looking statements contained in this news
release are expressly qualified by this cautionary
statement.
SOURCE AltaGas Ltd.
