InfraREIT Postpones Purchase of ROFO Projects
OREANDA-NEWS. InfraREIT, Inc. (NYSE: HIFR) (InfraREIT or the Company) today announced that the conflicts committee of its board of directors has decided, in light of recent market conditions, to postpone consideration of the purchase of the Golden Spread Electric Coop interconnection (Golden Spread Project) and the Cross Valley transmission line (Cross Valley Project). As previously disclosed, affiliates of Hunt Consolidated, Inc. (Hunt) offered these projects to InfraREIT, and negotiations had been ongoing. The current owners of the projects have informed the Company that they intend to transfer the projects to the Company's tenant, Sharyland Utilities, L.P. (Sharyland). Sharyland is owned by members of the Hunt family and controlled by Hunter L. Hunt, who is a member of the Company's board of directors.
"The conflicts committee of our board of directors made this decision within the parameters of our existing agreements with Hunt and with the best interests of our stockholders in mind," said David A. Campbell, Chief Executive Officer of InfraREIT. "InfraREIT will have the ability to initiate purchase discussions on these projects at a later date as market conditions improve. Hunt and Sharyland are fully supportive of this approach."
The Company anticipates that footprint capital expenditures will enable a projected compound annual growth rate (CAGR) range in dividends per share of 8 percent to 10 percent from 2015 through 2018, assuming no significant changes to Sharyland's key regulatory parameters. The Company expects to fund footprint capital expenditures through the end of 2018 without raising proceeds from additional equity offerings. Given the decision to postpone consideration of the purchase of the Golden Spread Project and Cross Valley Project at this time, the Company is no longer providing guidance regarding the potential impact of these projects on the Company's dividend per share CAGR range.
Hunt reiterated its intention for InfraREIT to be the primary owner of its transmission and distribution development projects as those projects are completed and placed in service. Hunt has also informed InfraREIT that it expects to offer the Golden Spread Project and Cross Valley Project to InfraREIT in the future.
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