Caribbean Utilities Company, Ltd. Announces Rights Offering

Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange under the trading symbol “CUP.U”.

Caribbean Utilities Company, Ltd. (TSX: CUP.U) (“CUC” or the “Company”) announces that it will be making a rights offering (the “Offering”) under which holders (the “Shareholders”) of Class A Ordinary shares (the “Class A Ordinary Shares”) of the Company as at the close of business on the record date of September 27, 2024 (the “Record Date”) will be issued rights (the “Rights”) to subscribe for Class A Ordinary Shares on the basis of one Right for each Class A Ordinary Share held. The Offering will be made in the Cayman Islands and in all of the provinces of Canada (the “Eligible Jurisdictions”).

Pursuant to the Offering, Shareholders will receive one Right for each Class A Ordinary Share held. Each Right entitles the holder thereto to subscribe for 0.10 of a Class A Ordinary Share and every 10 Rights entitle the holder thereto to subscribe for one Class A Ordinary Share upon payment of the subscription price of US$13.41 (the “Subscription Price”) per Class A Ordinary Share (the “Basic Subscription Privilege”) on or before 4:00 p.m. (Toronto time) on October 31, 2024 (the “Expiry Time”), after which time unexercised Rights will be void and of no value. No fractional Class A Ordinary Shares will be issued under the Offering.

Shareholders who fully exercise their Rights in accordance with their Basic Subscription Privilege will also be entitled to subscribe for additional Class A Ordinary Shares in the Offering, if available as a result of unexercised Rights prior to the Expiry Time (as defined below), subject to certain limitations set out in the rights offering circular of the Company (the “Circular”).

The Rights are expected to trade on the TSX under the trading symbol “CUP.RT.U” commencing on September 27, 2024 until 12:00 p.m. (Toronto time) on October 31, 2024. The TSX has conditionally approved the listing of the Class A Ordinary Shares issuable upon exercise of the Rights, subject to the Company fulfilling all of the listing requirements of the TSX.

There are currently 38,222,985 Class A Ordinary Shares issued and outstanding. Assuming all of the Rights issued under the Offering are validly exercised, the Company expects to raise gross proceeds of approximately US$51.3 million from the Offering. The Company intends to use the net proceeds of the Offering to finance alternative energy projects, ongoing additions and upgrades to CUC’s generation, transmission, and distribution systems, and for general corporate purposes.

The rights offering notice (the “Notice”), a Rights direct registration statement and a Rights subscription form (“Subscription Form”) will be mailed to each registered Shareholder as at the Record Date that is resident in the Eligible Jurisdictions. Registered Shareholders who wish to exercise their Rights must deliver or mail the completed Subscription Form, together with applicable funds, to the rights agent, TSX Trust Company or Scotiabank & Trust (Cayman) Ltd., as applicable, on or before the Expiry Time. Shareholders resident in the Eligible Jurisdictions who own their Class A Ordinary Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary. Subject to the detailed provisions of the Circular, Rights will not be delivered to, nor will they be exercisable by, persons resident outside of the Eligible Jurisdictions unless such holders can establish that the transaction is exempt under applicable legislation. Rather, such Rights may be sold on their behalf. If you are a Shareholder and reside outside of the Cayman Islands or the provinces of Canada, please review the Notice, Circular and notice to U.S. Shareholders or ineligible Shareholders, as applicable, to determine your eligibility and the process and timing requirements to receive and exercise your Rights.

The Stand-By Commitment

In connection with the Offering, the Company has entered into a stand-by purchase agreement dated the date hereof (the “Stand-By Agreement”) with Fortis Energy Caribbean Inc. (“FECI”), a wholly-owned subsidiary of Fortis Inc. (the “Stand-By Purchaser”), the Company’s controlling Shareholder. The Stand-By Purchaser has agreed, subject to certain terms and conditions, to purchase from the Company, at the Subscription Price, all of the Class A Ordinary Shares that are not otherwise subscribed for and purchased under the Offering by holders of Rights so that the maximum number of Class A Ordinary Shares that may be issued in connection with the Offering will have been issued (the “Stand-By Commitment”).

As of the date hereof, FECI owns 58% of the issued and outstanding Class A Ordinary Shares on a non-diluted basis. Following completion of the Offering, assuming the Offering is fully subscribed, FECI will own 58% of the issued and outstanding Class A Ordinary Shares on a non-diluted basis.

There is no fee payable by the Company to FECI in respect of the Stand-By Commitment. The Company has agreed to pay the reasonable fees and out-of-pocket expenses of FECI in connection with the negotiation and execution of the Stand-By Agreement.

FECI is a “related party” of the of the Company under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as FECI owns more than 10% of the issued and outstanding Class A Ordinary Shares. The Offering is not subject to the related party provisions of MI 61-101 based on a prescribed exception for rights offerings. Entry into the Stand-By Agreement on behalf of the Company was considered and approved by the non-conflicted members of the board of directors of the Company.

Additional Information

The Rights and the Class A Ordinary Shares issuable upon exercise of the Rights have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and accordingly, the Rights and the Class A Ordinary Shares are not being publicly offered for sale in the “United States” or to “U.S. persons” (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended). This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. There shall be no sale of the securities in any jurisdiction in which an offer to sell, a solicitation of an offer to buy or a sale would be unlawful.

This release shall not constitute an offer to sell or the solicitation of an offer to buy the securities of the Company. There shall be no offer or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.