ONE Gas, Inc. announced that it plans to make a public offering of 1,200,000 shares of its common stock worth nearly $89 million.
As part of the offering, ONE Gas has granted to the underwriter an option to purchase up to 180,000 additional shares of ONE Gas’ common stock.
ONE Gas intends to enter into a forward sale agreement with Bank of America, N.A., referred to in such capacity as the forward purchaser. In connection with the forward sale agreement, the forward purchaser or its affiliate, acting as forward seller, at ONE Gas’ request, expects to borrow from third parties and sell 1,200,000 shares of ONE Gas’ common stock to the underwriter in the offering in connection with the forward sale agreement described below.
As part of the offering, ONE Gas intends to grant to the underwriter an option to purchase up to 180,000 additional shares of ONE Gas’ common stock. If such option is exercised, ONE Gas may, in its sole discretion, enter into an additional forward sale agreement with the forward purchaser with respect to such additional shares, and ONE Gas currently expects that, if such option is exercised, it will do so.
BofA Securities is acting as the sole underwriter for the offering and proposes to offer the shares of common stock from time to time for sale in one or more transactions on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.
Pursuant to the terms of the forward sale agreement, ONE Gas will agree to sell to the forward purchaser or its affiliate (subject to ONE Gas’ right to elect net share or cash settlement of the forward sale agreement) 1,200,000 shares of ONE Gas’ common stock (or 1,380,000 shares if the underwriter’s option to purchase additional shares is exercised in full and ONE Gas elects to enter into an additional forward sale agreement with respect to such exercise, as described above), at a price per share equal to the price at which the underwriter purchases the shares from the forward seller. Settlement of the forward sale agreement is expected to occur no later than December 31, 2024.
ONE Gas will not initially receive any proceeds from the sale of shares of its common stock by the forward seller or its affiliate, unless an event occurs that requires ONE Gas to sell its common stock to the underwriter in lieu of the forward seller borrowing and selling shares of ONE Gas’ common stock to the underwriter. Although ONE Gas expects to settle the forward sale agreement entirely by the full physical delivery of shares of its common stock in exchange for cash proceeds, ONE Gas may elect cash settlement or net share settlement for all or a portion of its obligations under the forward sale agreement.
If ONE Gas elects to cash settle or net share settle the forward sale agreement, ONE Gas may not receive any proceeds from the issuance of shares, and ONE Gas will instead receive or pay cash (in the case of cash settlement) or receive or deliver shares of its common stock (in the case of net share settlement). ONE Gas intends to use any net proceeds received for general corporate purposes, which may include repayment or refinancing of debt, working capital, construction and acquisition expenditures and investments.
Source: ONE Gas release