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Iberdrola Raises Close to 3.4 Billion Euros in Record Time for the Acquisition of Energy East

27/06/2007

The Board backed unanimously the new transaction in the U.S. and its financing model

IBERDROLA RAISES CLOSE TO 3.4 BILLION EUROS IN RECORD TIME FOR THE ACQUISITION OF ENERGY EAST

  • Through this successful operation, which represents  an unprecedented backing of the company by the capital markets, IBERDROLA will issue 85 million new ordinary shares, representing approximately 7% of existing capital
     
  • The Company has proven again its capacity and agility to raise economic resources and has secured the necessary financing for the acquisition of Energy East, strengthening its shareholder base and its sound financial profile
     
  • Spanish and international institutional investors have subscribed to the capital increase, which was implemented through an accelerated private placement, at a price of 39.70 euros per share

IBERDROLA has completed in record time, the capital increase carried out by an Accelerated Bookbuilt Offer (ABO) for the financing of the friendly acquisition of the U.S. utility Energy East, agreed by both Boards on Monday.

By this placement, approved unanimously yesterday by the Board, IBERDROLA will issue a total of 85 million new shares, to an amount of close to 3.4 billion euros (39.70 euros per share), representing about 7% of existing capital.

The Company, which has proven again its capacity and agility to raise economic resources, has secured the necessary financing for the acquisition of Energy East, strengthening its shareholder base and maintaining its financial profile.

To this capital increase, for which IBERDROLA has appointed ABN AMRO ROTHSCHILD, CREDIT SUISSE and JP MORGAN as Joint Global Co-ordinators and Book runners to the transaction and URIA MENENDEZ and CMS ALBIÑANA & SUAREZ DE LEZO acted as legal advisors, have tapped institutional investors, both national and international, thus broadening the shareholder base.

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.

IBERDROLA announced on Monday the agreement for the acquisition of 100% of Energy East, an operation that will consolidate the new Group as one of the largest electric companies in the world. This friendly integration will be effected via a merger of Green Acquisition Capital Inc, a subsidiary for which IBERDROLA  will provide the necessary resources, into Energy East.

The agreement between IBERDROLA and Energy East is subject to approval by the Shareholders of Energy East. Due to the fact that Energy East and its subsidiaries operate in a regulated sector, the relevant authorizations will be required. This process is expected to be completed during 2008.

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