Banks underwrite $1.9 billion for Emera's planned purchase of Teco Energy

HALIFAX – Emera Inc. (TSX:EMA) has arranged to get at least $1.9 billion from a group of banks to help pay for the Nova Scotia company’s purchase of Teco Energy Inc., a U.S. company with electric and gas utilities in Florida and New Mexico.

The Teco Energy purchase — worth about US$10.4 billion including assumed debt — will extend Emera’s presence to the southern states, including regional offices in Tampa, Fla., and Albuquerque, N.M.

The Halifax-based company announced Friday that it has a deal to buy Teco (NYSE:TE) for US$27.55 per share in cash, or about US$6.5 billion. It will also assume US$3.9 billion of debt.

The $1.9 billion worth of debentures to be issued to the banks can be converted to Emera equity. The banks have the option to purchase up to an additional $285 million of the securities at the same price within 30 days of closing.

Emera’s main presence south of the border so far has been in the U.S. Northeast. It also operates in some parts of the Caribbean as well as in the Atlantic provinces, including Newfoundland and Labrador.

Among Emera’s high-profile projects is the $1.6-billion Maritime Link undersea cable project to carry electricity from the Muskrat Falls hydroelectric project in Labrador to the island of Newfoundland and then to Nova Scotia.

Note to readers: This is a corrected story. Earlier headlines misspelled Teco.