In a financial sale announced Oct. 7 by Albuquerque-based PNM Resources, a state of Washington-based investment company controlled by Microsoft's billionaire founder Bill Gates added to its holdings as the largest single shareholder in PNM. The transaction involved PNM Resources issuing $100 million of equity-linked securities, known as "Hybrid Income Term Security Units (HITS)."
With some of the proceeds being applied to its TNP Enterprises acquisition, PNM said that in August 2004 it agreed with Gates' Cascade Investment, LLC, to issue the so-called hybrid units, or HITS.
Based in Kirkland, WA, Cascade Investment is a privately held company that serves as an investment vehicle of Gates, Microsoft chairman, according to PNM's announcement. Cascade is the largest holder of PNM Resources common stock, owning approximately 5.5 million shares.
(Gates' interest in PNM apparently goes along with his billionaire friend Warren Buffet's interest in private-sector energy utilities. Buffet's Berkshire Hathaway is the owner of Iowa-based MidAmerican Energy, a utility hold company that recently agreed to buy ScottishPower's Portland, OR-based U.S. utility, PacifiCorp.)
Each HITS unit issued in the Oct. 7 transaction has an initial coupon of 6.625% and consists of an interest in a senior unsecured note and an obligation to purchase stock in three years, according to PNM Resources.
"The proceeds will be used to repay short-term debt issued to finance the TNP Enterprises acquisition and to fund construction of the Luna Energy Facility near Deming, NM," a PNM spokesperson said. PNM holds a one-third interest in the partially constructed natural gas-fired Luna plant that Duke Energy originally developed.
PNM Resources completed the acquisition of Fort Worth, TX-based TNP, parent of Texas-New Mexico Power, in June. With the acquisition and through its subsidiaries, PNM Resources now serves nearly 1.2 million customers: 725,000 electric customers in Texas and New Mexico and 471,000 natural gas customers in New Mexico. The new combined company is expected to have consolidated operating revenues of more than $2.3 billion, with 3,420 employees, 4,280 miles of electric transmission lines and 18,247 miles of electric distribution lines.
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.