Vistra launches $2B preferred stock repurchase program

Vistra Energy

Vistra, the Texas-based integrated retail electricity and power generation company, announced this Tuesday it has initiated a $2 billion share repurchase program. The company intends to repurchase its common stock with the proceeds and to launch its sustainability efforts further.

Firstly, the company offers a million shares of its 8% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. The potential buyers could be institutional buyers or certain non-US persons, as long as they are following the 1933 Securities Act and other regulations.

In addition, the offering sale price is $1000 per share, and it will be open until October 15. According to the statement, the company expects to receive around $1 billion from the Preferred Stock sale before deducting the initial purchaser discount and other estimated offering expenses.

Moreover, as outlined above, Vistra will use the net proceeds of the transaction to repurchase its common stock; beginning as early as November 2021, and until December 2022. This program is, in fact, a part of a broader plan that involves capital allocation to enhance shareholder returns.

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Vistra to develop its battery storage and renewable energy portfolio

In fact, Vistra’s Board of Directors approved the $2 billion share repurchase program; the strategy identified four key strategic areas imperative for the company’s growth. Such areas are: driving long-term sustainable value through Vistra’s integrated business model; returning significant capital to shareholders; maintaining a strong balance sheet, and accelerating its zero-carbon pipeline.

Additionally, Vistra intends to develop its battery energy storage and renewable projects by accessing the significant availability of third-party green investments. To achieve such a status, the company needed a robust financial strategy to assume necessary advancements in technology.

About the matter, Curt Morgan, Vistra’s CEO, said. “Today, Vistra took an important first step in executing on the output of its strategic review by taking advantage of the unprecedented and unsustainable differences in the cost of capital implied in its equity value as compared to other forms of capital, such as debt and preferred stock.”

Finally, he also remarked. “The strategic imperatives announced today are a result of a months-long strategic review by the Company.” He outlined that, for Vistra, delivering strong, consistent long-term earnings into the future, while investing in its retail and zero-carbon business is a priority.

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