Iberdrola launches 5 billion euro share sales to boost the network
Iberdrola has launched a capital increase of 5 billion euros ($5.9 billion), the largest sale of shares in Europe so far this year, strengthening its investment in its electricity network and further strengthening its expansion in the US and the UK.
The Spanish energy giant said in a regulatory submission on Wednesday that it will implement accelerated book building offerings. According to terms seen by Bloomberg, the company has set an instructed price guidance of 15.10 euros per share on the market. The interest of indicator investors exceeds the size of the transaction.
Shared sales will bolster Ibadra’s pivot towards the power grid, which will account for a large portion of the Bilbao-based company’s planned spending by 2026. Spanish utilities focus on the US and UK, which represent “unplanned investment opportunities” with tariff frameworks for transmission and distribution activities in two markets.
The sale of the shares will bring about €15 billion in total investment prospects per year over the next few years, the utility said.
Iberdrola expects its regulated assets base to triple from the 2031 level to more than 90 billion euros in 2031.
The company is looking at “low incentives for investment, operational and maintenance costs” in Spain.
The reliability of Spain’s electricity network has been questioned in the wake of a nationwide blackout that millions of people were not accompanied by electricity at the end of April.
Spanish market regulator CNMC proposes increasing the increase in network returns below the levels of other European countries to 6.46%. Utility lobby group AELEC, a member of Iberdrola, says low returns could put investment in the country at risk.