Scana faced the prospect of having to do a potential multi-billion-dollar equity issuance -- on a $5.5 billion market cap -- after regulators reacted somewhat coolly to its plan to deal with the cost of the abandoned plants.
On the first slide of Dominion's deck, shareholders come in fourth on the list of stakeholders who are supposed to benefit from the deal, behind customers, employees and state officials.
While its unregulated operations -- including a liquefied natural gas export terminal that is under construction -- provide oomph to earnings, they also get less-favorable treatment from credit-rating agencies than the boring old poles-and-wires business.
Similarly, Dominion has ambitious earnings-growth targets, backed partly by unregulated pipeline and LNG export projects -- and net debt of almost 6 times trailing Ebitda as of the end of the third quarter, according to figures compiled by Bloomberg.
There may also be an added bonus for Dominion if it can extend its proposed Atlantic Coast Pipeline project, bringing cheap Marcellus basin natural gas into the Southeast, via Scana.
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- Dominion Energy to Buy Scana in $7.66 Billion Deal--2nd UpdateMorningstar.com