Black Hills Corporation (NYSE:BKH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on March18, 2016, Black Hills Corporation, a South Dakota corporation (the “Company”), entered into an Equity Distribution Sales Agreement (the “Original Sales Agreement”) to sell shares of common stock having an aggregate gross sales price of up to $200 million, from time to time, through an “at-the-market” equity offering program (the “ATM Program”) utilizing the Company’s shelf Registration Statement on FormS-3 originally filed on August6, 2014 (Registration No.333-197895) (the “Previous Shelf”). Approximately $120 million shares of common stock were issued and sold under the Original Sales Agreement.
In connection with the scheduled expiration of the Previous Shelf, the Company has filed a new shelf Registration Statement on FormS-3 on August4, 2017 (Registration No.333-219705) (the “Renewal Shelf”) and has entered into an Amended and Restated Equity Distribution Sales Agreement on August4, 2017 (the “Sales Agreement”) with MUFG Securities Americas Inc., Merrill Lynch, Pierce, Fenner& Smith Incorporated and Morgan Stanley& Co. LLC (collectively, the “Agents”), which amends and restates the Original Sales Agreement in its entirety. Among other things, the Sales Agreement provides for the continuation of the ATM Program using the Renewal Shelf and resets the size of the ATM Program to an aggregate gross sales price of up to $300 million (the “ATM Shares”).
The sales, if any, of the ATM Shares, may be made in sales deemed to be “at-the-market offerings” as defined in Rule415 under the Securities Act of 1933, as amended, including by sales made directly on or through the New York Stock Exchange, or another market for the Company’s common stock, sales made to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or at negotiated prices, or as otherwise agreed with the applicable Agent. The Sales Agreement provides for the Company to submit orders to only one Agent relating to the sale of ATM Shares on any given day. Subject to the terms and conditions of the Sales Agreement, the Agents will use their commercially reasonable efforts to sell on the Company’s behalf all of the designated ATM Shares. The Sales Agreement provides for the Company to pay the Agents a commission of up to 2% of the gross sales price per share sold through them as agent under the Sales Agreement. The Company may also sell ATM Shares under the Sales Agreement to one or more of the Agents, as principal for their own accounts, at a price per share agreed upon at the time of sale. Actual sales will depend on a variety of factors to be determined by the Company from time to time. The Company has no obligation to sell any of the ATM Shares under the Sales Agreement, and may at any time suspend solicitation and offers under the Sales Agreement.
The Sales Agreement contains representations and warranties and covenants that are customary for transactions of this type. In addition, the Company has agreed to indemnify the Agents against certain liabilities on customary terms. Some of the Agents and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings, including but not limited to commercial lending services, with the Company, its direct or indirect subsidiaries or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
The Company intends to use the net proceeds, if any, from the ATM Program for working capital and general corporate purposes, which may include, among other things, capital expenditures, acquisitions, investments, other business opportunities and repayment or refinancing of outstanding debt.
The ATM Shares will be offered and sold to the Renewed Shelf, which became effective upon filing with the Securities and Exchange Commission, the related Prospectus dated August4, 2017 and the Prospectus Supplement, dated August4, 2017. Copies of the Sales Agreements and an opinion related to the ATM Shares are attached hereto as exhibits and are expressly incorporated by reference herein and into the Registration Statement. The foregoing description of the terms of the Sales Agreement is qualified in its entirety by reference to the actual terms of the Sales Agreement, which is filed as Exhibit1.1 attached hereto and incorporated herein by reference.
