In a strong market for energy stocks, Southern Energy Inc. opened trading on the New York Stock Exchange Wednesday at $28�, up $6� over the $22/share offering price.
The shares of Southern Co.'s unregulated electric power subsidiary had been expected to be priced at between $18-20 each, up from an original range of $15-17.The stock began trading under the symbol SOE.
The initial offering of 58 million common shares, excluding the underwriters' overallotment options, is expected to provide $1.276 billion of gross proceeds to Southern Energy, Southern said. Following the offering, Atlanta-based Southern will continue to own about 80% of Southern Energy's stock.
Southern Energy also reported the pricing of a public offering of convertible trust preferred securities. The securities were priced to yield 6.25% with an effective conversion price of $27.50 per share. The gross proceeds to Southern Energy from the offering of the convertible trust preferred securities are expected to be about $300 million, excluding the purchasers' overallotment option, Southern said.
The convertible trust preferred securities will trade on the New York Stock Exchange under the symbol SOEPrA.
Southern said the net proceeds to Southern Energy of the combined offerings is expected to be about $1.506 billion, excluding the overallotment options.
Both offerings were jointly led by Goldman, Sachs & Co. and Morgan Stanley Dean Witter & Co.
Southern Energy, with total generating capacity of about 15,000 Mw and operations in 12 countries, develops, builds, owns and operates power production and delivery facilities and provides services to utilities and industrial companies around the world.
Market observers expect an independent Southern Energy to generate better returns and puts the company on a similar standing with firms such Enron Corp. and Dynegy Inc. in a deregulating energy market.