Duke Energy Partners With GIC To Secure Minority Investment In Duke Energy Indiana

Friday, January 29, 2021 at 11:51 AM

By Duke Energy, news release

Duke Energy will remain majority owner and sole operator of DEI.

(Charlotte, N.C.) - Duke Energy (NYSE: DUK), alongside GIC, today announced that it has entered into a definitive agreement for an acquisition of a 19.9 percent interest in Duke Energy Indiana (DEI), a subsidiary of Duke Energy, by an affiliate of GIC Private Limited, Singapore’s sovereign wealth fund and an experienced investor in U.S. infrastructure.

Duke Energy today also announced its 2021 adjusted earnings per share (EPS) guidance range of $5.00 to $5.30. The transaction with GIC bolsters the company’s growth potential and supports its increased long-term adjusted EPS growth rate of 5 to 7% through 2025, based off of a 2021 adjusted EPS midpoint of $5.15. This is up from the previously stated 4 to 6% rate.

Under the terms of the agreement, GIC will acquire a 19.9 percent indirect minority interest in Duke Energy Indiana for a total purchase price of $2.05 billion, a significant premium to Duke Energy’s current public equity valuation.

Proceeds from the transaction will fund Duke Energy’s increased $58 to $60 billion capital plan – a five-year plan that will accelerate its clean energy transition – and redeploy capital to support increased growth investments within its portfolio of regulated utilities. With this source of capital and increased financial strength, Duke Energy will continue providing reliable service and investing in important energy infrastructure while maintaining affordable rates for customers.

Given the innovative transaction structure, Duke Energy will receive proceeds in two, separate phases to efficiently align with the company’s capital needs. The transaction allows Duke Energy to forego its previously announced plan to raise $1 billion of common equity.

Duke Energy will continue to operate DEI with its best-in-class workforce and will remain the majority owner, with an 80.1 percent stake in the business.

“We are pleased to have GIC as a long-term investor in DEI,” said Lynn Good, Duke Energy’s chair, president and chief executive officer. “This agreement with GIC allows Duke Energy to not only partner with a highly respected global investor, it also strengthens our confidence as we increase our long-term adjusted EPS growth rate to 5 to 7 percent. With this agreement, Duke Energy is well positioned to effectively finance our robust investment plan in a clean energy future and continue delivering sustainable value to our investors.”

“Our agreement with GIC highlights the value and growth potential of DEI and recognizes the continued hard work and commitment of our people,” said Stan Pinegar, DEI state president. “Delivering safe and reliable service to our customers and serving our communities remains our top priority.”

Ang Eng Seng, GIC’s Chief Investment Officer of Infrastructure, said, “As a long-term investor, GIC strongly believes that companies focused on meaningful sustainability practices will create better risk-adjusted returns over the long term. Duke Energy’s proven management team and clear commitment to a clean energy transition make this an attractive partnership opportunity for GIC. This capital will help create long-term value by directly supporting Duke Energy’s ability to capitalize on their stated ESG and decarbonization goals. We look forward to a successful transaction and long-term investment.”

Transaction structure

The $2.05 billion in proceeds will be received in a staggered, two-phase closing, structured in evenly split payments. The first closing is expected to occur in the second quarter of 2021. Under the terms of the agreement, Duke Energy has the discretion to determine the timing of the second closing, but it will occur no later than January 2023.

GIC will invest in a newly formed intermediate holding company of which DEI will be a wholly owned subsidiary. GIC will receive certain limited rights commensurate with the minority stake.

The transaction is subject to customary closing conditions, including approval from the Federal Energy Regulatory Commission (FERC) and completion of review by the Committee on Foreign Investment in the United States (CFIUS).

J.P. Morgan Securities LLC served as Duke Energy's lead financial advisor, and Centerview Partners also served as a financial advisor. Skadden, Arps, Slate, Meagher & Flom LLP served as Duke Energy’s legal advisor.

Barclays served as GIC’s exclusive financial advisor. Sidley Austin LLP served as GIC’s lead legal advisor alongside Steptoe & Johnson LLP and Ice Miller LLP.

More from Local News


Memorial Day Services in Eagle Country

Eagle Country 99.3 is proud to salute our U.S. military veterans and those who have died in the line of duty.

SDCSC Elementary Students, Staff Help Make Dillsboro 5K Biggest Yet

Students and staff from Aurora, Dillsboro and Manchester participated.

Milan Boys Track Team Enjoys Record Year

The team won the ORVC and set several school records.

Rising Sun Goes Undefeated in ORVC, Places Four on All-Conference Team

The Lady Shiners are ranked among the top teams in Class 1A.

Southwestern Baseball Four-Peats, Leads ORVC All-Conf. Team with Four Selections

Seventeen players were named to the 2024 ORVC Baseball All-Conference Team.

On Air

Lady A What A Song Can Do 21:10
Tracy Byrd I'm From The Country 21:07
Doug Stone Jukebox with a Country Song 21:04
Fox News Fox News National Newscast 21:03