Elexicon, the electricity distribution company serving nearly 200,000 customers including the City of Belleville, announced that several of its shareholders have agreed through a memorandum of understanding to invest more than $62 million of additional equity in the company.
Officials say the move demonstrates a commitment from Belleville, Whitby, Clarington and Ajax to enable Elexicon to increase its investment in the local grid to meet the needs of the fast growing communities and provide customers with safe and reliable energy.
“The equity investment enables us to increase the capacity and capabilities of our grid in order to keep pace with growth and better serve customers in all of our communities,” said Amanda Klein, Elexicon’s Chief Executive Officer. “This is a key building block for Elexicon to provide customers, communities and investors with sustainable growth and value.”
Fact Sheet
What happened?
- Elexicon’s shareholder Councils in Ajax, Belleville, Clarington and Whitby have agreed to redeem their promissory notes and invest more than $62 million of the proceeds into equity in the company.
What does that mean?
- A promissory note is essentially a debt financing (or IOU) for the company.
- By converting those notes into equity, these shareholders will be exchanging debt for ownership.
- Instead of being repaid as creditors, they’ll be more directly investing in the company’s success as shareholders.
Why is this important?
- It strengthens Elexicon’s balance sheet and enables the company to increase its investment in the grid.
- It gives Elexicon greater financial flexibility.
- It strengthens Elexicon’s ability to support community growth and reliability.
- It enables shareholders to support their communities by enabling growth and economic development, providing customers with safe and reliable electricity.
How does this benefit stakeholders?
- Customers and communities: confidence that we’re positioned to support their communities with new homes, businesses and services, as well as providing for their current and future electricity needs. This includes investments to improve reliability and create more grid capacity.
- Investors: stronger financial foundation for future value creation.
