Fortis Inc. Provides Standby Commitment to Caribbean Utilities Company, Ltd.

Rhea-AI Summary

Fortis Inc. (TSX/NYSE: FTS) announced that its subsidiary, Fortis Energy Caribbean Inc. (FECI), will provide a standby commitment for a rights offering by Caribbean Utilities Company, (CUC) (TSX: CUP.U). CUC plans to issue up to 3,822,298 Class A Ordinary Shares, representing 10% of its current outstanding shares. FECI will acquire a minimum of 2,220,422 CUC shares at US$13.41 per share, totaling US$29,775,859.02. The standby commitment allows FECI to acquire up to 1,601,876 additional shares at the same price.

If no other subscribers participate, FECI could acquire all 3,822,298 CUC shares for US$51,257,016.18. Fortis currently owns about 58% of CUC shares and could increase its ownership to 62% if there are no other subscribers. The rights offering, expected to close around November 4, 2024, aims to finance alternative energy projects and system upgrades for CUC.

Positive

• Potential increase in Fortis' ownership of CUC from 58% to 62% if no other subscribers participate
• Opportunity for Fortis to invest up to US$51,257,016.18 in CUC shares
• Support for CUC's capital needs for alternative energy projects and system upgrades

Negative

• Significant capital outlay required for the standby commitment
• Potential dilution of other CUC shareholders if Fortis increases its ownership percentage

ST. JOHN'S, Newfoundland and Labrador, Sept. 23, 2024 (GLOBE NEWSWIRE) -- Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) announced today that its wholly owned subsidiary Fortis Energy Caribbean Inc. ("FECI") has agreed to provide a standby commitment (the "Standby Commitment") for a rights offering (the "Rights Offering") by Caribbean Utilities Company, Ltd. ("CUC") (TSX: CUP.U). Pursuant to the Rights Offering, CUC will issue up to an aggregate of 3,822,298 or 10% of its currently issued and outstanding Class A Ordinary Shares (the "CUC Shares"). FECI will exercise the rights issued to it in the Rights Offering and will acquire a minimum of 2,220,422 CUC Shares at a price of US$13.41 per CUC Share for aggregate consideration of US$29,775,859.02.

Subject to certain customary terms and conditions, FECI may acquire up to 1,601,876 additional CUC Shares at the same price pursuant to the Standby Commitment. If there are no other subscribers in the Rights Offering, FECI will acquire a total of 3,822,298 CUC Shares through the Rights Offering and Standby Commitment for aggregate consideration of US$51,257,016.18. Based on the average daily rate of exchange quoted by the Bank of Canada on September 19, 2024, the consideration in Canadian dollars is C$18.19 per CUC Share or aggregate consideration of C$69,527,600.62 should there be no other subscribers in the Rights Offering.

Prior to the Rights Offering, Fortis indirectly owned 22,204,229 CUC Shares representing approximately 58% of the CUC Shares. On closing of the Rights Offering, which is expected to occur on or about November 4, 2024, Fortis will beneficially own approximately 58% of the CUC Shares if the Rights Offering is fully subscribed or approximately 62% of the CUC Shares if there are no other subscribers in the Rights Offering.

The purpose of the Rights Offering is to provide CUC with capital to be used to finance alternative energy projects, ongoing additions and upgrades to its generation, transmission and distribution systems and for general corporate purposes.

Fortis will review its holdings in CUC Shares from time to time and may acquire additional securities or dispose of securities of CUC, in either case, in the open market, by private agreement or otherwise, depending on numerous factors, including without limitation, the availability of securities of CUC, economic conditions, market conditions and other business and investment opportunities available to Fortis.

An early warning report will be filed by Fortis in accordance with applicable securities laws. To obtain a copy of the early warning report, please contact Ms. Karen McCarthy, Vice President, Communications & Government Relations at media@fortisinc.com.

About Fortis

Fortis is a well-diversified leader in the North American regulated electric and gas utility industry with 2023 revenue of $12 billion and total assets of $69 billion as at June 30, 2024. The Corporation’s 9,600 employees serve utility customers in five Canadian provinces, ten U.S. states and three Caribbean countries. Fortis’ shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com, www.sedarplus.ca or www.sec.gov.

Fortis’ head office is located at Fortis Place, Suite 1100, 5 Springdale Street, St. John’s, Newfoundland and Labrador A1B 3T2.

CUC’s head office is located at 457 North Sound Road, Grand Cayman KY1-1101, Cayman Islands.

Forward-Looking Information

Fortis includes forward-looking information in this media release within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively referred to as “forward-looking information”). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance and business prospects and opportunities and may not be appropriate for other purposes. All forward-looking information is given pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. Wherever possible, words such as “anticipates”, “believes”, “budgets”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “may”, “might”, “plans”, “projects”, “schedules”, “should”, “target”, “will”, “would”, and the negative of these terms, and other similar terminology or expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information reflects management’s current beliefs and is based on information currently available to the Corporation’s management and includes statements relating to the expectation that FECI will acquire CUC Shares as a result of the Rights Offering and Standby Commitment. Although Fortis believes that the forward-looking statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties. For additional information on risk factors that have the potential to affect the Corporation, reference should be made to the continuous disclosure materials filed from time to time by the Corporation with Canadian securities regulatory authorities and the Securities and Exchange Commission. All forward-looking information included in this media release is given as of the date of this media release and Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

A .pdf version of this press release is available at: http://ml.globenewswire.com/Resource/Download/b8a555e1-5288-4201-854a-5b31f7929548

Additional Information
For more information, please contact:
Investor Enquiries:	Media Enquiries:
Ms. Stephanie Amaimo	Ms. Karen McCarthy
Vice President, Investor Relations	Vice President, Communications & Government Relations
Fortis Inc.	Fortis Inc.
248.946.3572	709.737.5323
investorrelations@fortisinc.com	media@fortisinc.com

FAQ

What is the purpose of the rights offering announced by Fortis Inc. (FTS) for Caribbean Utilities Company?

The purpose of the rights offering is to provide Caribbean Utilities Company (CUC) with capital to finance alternative energy projects, ongoing additions and upgrades to its generation, transmission and distribution systems, and for general corporate purposes.

How many CUC shares could Fortis Inc. (FTS) acquire through the rights offering and standby commitment?

Fortis Inc. could acquire up to 3,822,298 CUC shares through the rights offering and standby commitment if there are no other subscribers, representing approximately 10% of CUC's currently issued and outstanding Class A Ordinary Shares.

What is the price per share that Fortis Inc. (FTS) will pay for CUC shares in the rights offering?

Fortis Inc. will pay US$13.41 per CUC share in the rights offering, which is equivalent to approximately C$18.19 per share based on the exchange rate quoted on September 19, 2024.

When is the expected closing date for the rights offering announced by Fortis Inc. (FTS)?

The rights offering is expected to close on or about November 4, 2024.