CUC raises $40 million

| 31/05/2009

(CUC): Local power company Caribbean Utilities Company, Ltd. (CUC) said on Friday that it now had access to the first tranche of a US$40 million private placement of 7.50% Senior Unsecured Notes which will be due to be paid back in May 2024. The firm said that the debt offering was privately placed with institutional investors in the United States and that the first $30 million will be used to repay short-term debts and to finance ongoing upgrades to CUC’s generation and transmission and distribution system.

 “We are pleased to have been able to secure this additional financing on favourable terms at a time when many companies are unable to access growth capital,” said President and Chief Executive Officer, Richard Hew. “CUC’s status as a publicly traded company with a strong debt rating helps secure access to efficient capital markets which enable us to sustain our commitment of over 40 years to reliable and efficient electrical service to Grand Cayman.”

He explained that without access to these sources of capital, CUC would be challenged to make the significant long term capital investments required to meet growth and reliability requirements of Grand Cayman. The completion of ongoing projects such as the Rum Point to Frank Sound transmission loop and the 16 megaWatt MAN Diesel generation capacity expansion, ensure that customers receive reliable service and also help sustain a high standard of infrastructure necessary to support existing industry and attract future development to the island, the CEO added.

CUC said the notes will not be registered under the Securities Act of 1933 (the “Securities Act”) as amended, nor will they be registered under any state securities laws. Unless so registered, the notes may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

The second tranche of US$10 million is scheduled to close in July 2009 the firm said.


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  1. Eyedol says:

    It is strange that CUC can be mostly owned outside the USA and they cant insure their property against Hurricane damage

  2. Anonymous says:

    It is strange that CUC can be mostly owned outside the USA and they cant insure their property against Hurricane damage. Next time I am asked to reimburse them for Hurricane damage I am going back to my kerosene lamp.

  3. Soldier-Crab says:

    This has gone far enough.  It is completely unacceptable that control of a major public utility lies outside the country.  There must be an amendment to the Electricity Law stipulating that 51% of an electricity producers shares must be held by Caymanians; alternatively simply remove the company’s exemption from compliance with the Local Companies Control Law.

    • Anonymous says:

      Do you understand the concept of a publicly listed company? How much of their listed shares have you purchased? You can buy their shares for yourself you know. In addition, they have publicised their customer share ownership plan for years. Furthermore how do you know that control lies outside the country? Usually there is a distinction between control and ownership. I suspect that control rests within Cayman whilst ownership may or may not.  Amused.

  4. Anonymous says:

    jesus wept that’s an awfully generous interest rate they are paying on the bonds. Where can we buy it!?

    No doubt it’ll mean some more extortionate and above inflation price hikes every year for the foreseeable future.

    Again the people will have to bail these idiots out as they head into financial meltdown.


    • Anonymous says:

      One minute they are said to be profiteering off the backs of the consumers, and the next they are headed into financial meltdown. Listen up – the lower CUC’s return is the more it will have to pay to raise capital. The 2.4% increase is not extortionate and is a fraction of the rate of inflation.  

  5. Expat24,372 says:

    Seems a bit expensive to me, by the time CUC have to pay back the $40 million in 2024, they’ll have already paid $45 million in interest.  Can they really expect to be able to pay that amount back or are those still here in 2024 going to get hit with another surcharge on thier bills.

    I’m almost pleased about that rollover now!