12 Aug 2005capital raising announcement● NeutralMajor
On 9 August 2005 the partnership agreed to privately sell 4,300,000 new common units at $30.75 each ($132.2 million; about $129.2 million net per the press release) to a group of investment funds. Proceeds help pay for the $455 million Valero L.P. asset purchase, and the sale closes only together with that purchase, now expected by the end of September 2005. Existing unitholders are diluted by the new units. The buyers cannot resell for 180 days, and the price drops if closing falls after the record date for the third-quarter distribution.
What it means for a shareholder
4.3m new shares at $30.75 to raise about $132m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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