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Scottish Power launches convertible bonds offer.

Electricity and gas group Scottish Power yesterday entered the debt market in a bid to raise pounds 343m towards major new energy projects.

The company said it was launching an offer of bonds that investors would be able to convert at a later date into ordinary Scottish Power shares.

It said it would use the proceeds of the issue to help fund the company's planned pounds 900m investment in new power generation schemes and asset maintenance in each of the next two years.

About 40pc of the cash will go towards new projects such as wind farms, network construction and gas storage, the group said.

Convertible bonds pay an annual return to investors and can be turned into shares at a later date.

The bond issue is expected to close in the first week of July and the bonds will be convertible at any time during their first eight years, the company said.

Scottish Power expects to set the conversion price at a 25pc-30pc premium to the price of the group's ordinary shares.

Finance director David Nish said: "The convertible bond market currently provides long term financing on attractive terms."

Scottish Power has 11 wind farms in Scotland and another 10 in the planning process.

A spokesman yesterday said the group was considering a further phase, although he added it was too early to give details. It plans to build most of the farms at onshore and offshore sites in Scotland.

Wind farms have prompted criticism from environmentalists and residents concerned about their noise, visual impact and potential risk to wildlife.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Jun 18, 2003
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