PORT HURON, Mich., May 22 /PRNewswire-FirstCall/ -- SEMCO ENERGY, Inc. today announced that it has entered into a privately negotiated exchange transaction whereby a holder of the Company's 5% Series B Convertible Cumulative Preferred Stock (the "Preferred Stock") will return to the Company, and the Company will retire, $11.98 million notional amount (59,900 shares) of the Preferred Stock currently held by the holder. Pursuant to the agreement, the Company will pay to the holder cash in the amount of $7,587,530.96 in combination with the issuance of 689,996 shares of the Company's Common Stock.
The number of shares of Common Stock to be issued is based on a price of $5.49 per share, which is the closing price of the Common Stock on May 22, 2006. The Company anticipates the transaction will have no impact on its earnings guidance for 2006.
The issuance of shares of Common Stock will be exempt from registration under the Securities Act of 1933 in reliance on Section 3(a)(9) of the Securities Act of 1933.
No underwriting discounts or commissions were involved in this transaction. This notice is neither an offer to sell nor a solicitation to buy securities.
SEMCO ENERGY, Inc. distributes natural gas to over 400,000 customers combined in Michigan, as SEMCO ENERGY GAS COMPANY, and in Alaska, as ENSTAR Natural Gas Company. It also owns and operates businesses involved in propane distribution, intrastate pipelines and natural gas storage.
The following is a "Safe-Harbor" statement under the Private Securities Litigation Reform Act of 1995. This release contains forward-looking statements that involve risks and uncertainties. Statements that are not historic facts, including statements about the Company's outlook, beliefs, plans, goals and expectations, are forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to, the effects of weather, the economic climate, competition, rising commodity prices and resulting increases in working capital requirements, changing conditions in the capital markets, regulatory approval processes and rate recovery mechanisms, gas procurement opportunities, compliance with covenants and success in accomplishing financing objectives, maintaining an effective system of internal controls, success in obtaining new business, success in defending claims against the Company, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings.
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