Business Context and Reporting Period
Company: Black Hills Corporation (BKH)
Filing Type: Form 8-K (Current Report)
Date of Report: June 16, 2023
Principal Executive Offices: Rapid City, SD
This filing reports the entry into a new material definitive agreement to establish an "at-the-market" equity offering program and the termination of the previous agreement.
Key Financial Metrics and Agreements
Equity Offering Program:
- Aggregate Offering Price: Up to $400,000,000.
- Instrument: Common Stock, par value $1.00.
- Agents/Forward Purchasers: Bank of Montreal, Bank of America, N.A., MUFG Securities EMEA plc, Mizuho Markets Americas LLC, and Royal Bank of Canada.
- Commission: Up to 2% of gross offering proceeds for sales agents; up to 2% of volume-weighted average sales prices for forward sellers.
Previous Program Status:
- Shares Issued/Sold: Approximately $260 million under the previous agreement (August 2020).
- Action: Previous Sales Agreement terminated on June 16, 2023.
Financial Metrics: The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity for the reporting period.
Material Changes
The primary material change is the replacement of the expiring "Previous Shelf" registration statement (filed August 4, 2020) with a new shelf Registration Statement on Form S-3 (Registration No. 333-272739) filed on June 16, 2023. This enables the continuation of the equity distribution program for up to $400 million.
Outlook, Risks, and Contingencies
Proceeds and Settlement:
- The Company will not initially receive proceeds from the sale of borrowed shares by Forward Sellers.
- Proceeds are expected upon future physical settlement of forward sale agreements.
- If the Company elects cash settlement or net share settlement, it may not receive proceeds and may owe cash or shares to the Forward Purchaser.
- Use of Proceeds: The Company may use net proceeds to repay amounts borrowed under existing credit facilities. Affiliates of the agents acting as lenders would receive pro rata portions of such repayments.
- Flexibility: The Company has no obligation to offer or sell shares and may suspend offers at any time.
Investor Verification Checklist
- Verify the full text of the Equity Distribution Sales Agreement (Exhibit 1.1) and Master Forward Confirmation (Exhibit 1.2) for specific terms not summarized here.
- Confirm the current status of the $260 million previously sold under the old agreement and any remaining capacity.
- Review the Company's latest 10-K or 10-Q for current debt levels to assess the potential impact of using proceeds for debt repayment.
- Monitor future filings for actual sales volumes and settlement methods (physical vs. cash/net share) under the new agreement.