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Aquila starts exchange for PIES
New York, June 2 - Aquila, Inc. said it has begun an exchange offer to encourage early conversion of its $345 million of 6.75% Premium Income Equity Securities (PIES).
The Kansas City, Mo., electricity and natural gas utility is offering a premium payable in common stock in addition to the 8.0386 shares that holders would receive for an optional conversion under the existing terms of the convertibles.
The exact number of shares will be set after the close of business on July 1. Holders will receive a number of additional shares equal to a $5.50 divided by the average of the daily volume-weighted average price from June 22 to the pricing date, with a maximum total number of shares of 9.8039. The maximum is equivalent to the highest conversion rate for the PIES at their mandatory conversion date of Sept. 15, 2007.
The exchange offer ends at 5 p.m. ET on July 6.
Union Bank of California, NA is the exchange agent. The Altman Group, Inc. is the information agent (800 461-9316). Credit Suisse First Boston is the dealer manager.
Aquila said it is carrying out its exchange to reduce its debt and interest expense and to provide it with additional financial flexibility.
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