Emera Incorporated Provides Update on Conversion Rights for Series A and B Preferred Shares
Emera Incorporated (“Emera” or the “Company”), a North American energy company headquartered in Halifax, has announced that it will not exercise its right to redeem any of the currently outstanding Cumulative Rate Reset First Preferred Shares, Series A (referred to as “Series A Shares”) or the Cumulative Floating Rate First Preferred Shares, Series B (referred to as “Series B Shares”) on the next scheduled redemption date, August 15, 2025.
As of the date of the announcement, there are approximately 4,866,814 Series A Shares and 1,133,186 Series B Shares currently outstanding and held by investors.
Shareholder Options on August 15, 2025
Given that Emera is not redeeming the Series A or Series B Shares on August 15, 2025, shareholders of both series will retain the right—subject to specific terms and conditions outlined in Emera’s May 26, 2010 prospectus supplement—to either keep their existing shares or convert them into the other series on a one-for-one basis.
This right of conversion applies to both series as follows:
For Holders of Series A Shares:
- Option 1: Continue Holding Series A
Shareholders may choose to retain some or all of their Series A Shares. If they do so, they will receive a new fixed-rate quarterly dividend applicable for the next five-year period, starting August 15, 2025. - Option 2: Convert to Series B
Shareholders may instead opt to convert some or all of their Series A Shares into an equal number of Series B Shares, which provide a floating rate quarterly dividend instead of a fixed rate.
For Holders of Series B Shares:
- Option 1: Continue Holding Series B
Investors may keep some or all of their Series B Shares and continue receiving the floating rate quarterly dividend. - Option 2: Convert to Series A
Alternatively, holders may choose to convert some or all of their Series B Shares into Series A Shares, in order to benefit from the fixed dividend rate that will apply from August 15, 2025, through August 14, 2030.
Conditions and Limitations on Conversion
While the conversion rights are guaranteed, their execution is subject to minimum outstanding share conditions designed to ensure sufficient liquidity for each share class after conversion.
These limitations are:
For Series A Shareholders Wishing to Convert to Series B:
- If the total number of Series A Shares remaining after conversion would fall below 1,000,000, then all remaining Series A Shares will be automatically converted into Series B Shares on August 15, 2025.
- Conversely, if the number of Series B Shares after conversion would fall below 1,000,000, then no Series A Shares will be converted and all conversion requests will be nullified.
For Series B Shareholders Wishing to Convert to Series A:
- If the total number of Series B Shares remaining after conversion would fall below 1,000,000, then all remaining Series B Shares will be automatically converted into Series A Shares on a one-for-one basis on the same date.
- On the other hand, if the number of Series A Shares after conversion would fall below 1,000,000, then no Series B Shares will be converted and all conversion requests will be voided.
In either scenario, Emera is obligated to notify affected shareholders in writing at least seven days prior to the August 15, 2025 Conversion Date, in accordance with the terms and procedures laid out in the original Prospectus.
Dividend Rate Determination
One of the key considerations for investors choosing whether or not to convert their shares is the new dividend rate that will apply for each series.
Important Dates:
- On July 16, 2025, Emera will publicly disclose the updated dividend rates:
- The fixed dividend rate that will apply to Series A Shares for the five-year period beginning August 15, 2025 and ending August 14, 2030.
- The floating dividend rate for Series B Shares that will apply for the 3-month period starting August 15, 2025 and ending November 14, 2025.
The new rates will be calculated in accordance with the terms outlined in the May 2010 Prospectus. These values are generally based on benchmarks such as the 5-year Government of Canada bond yield (for Series A) and 3-month Treasury bill rates or equivalent benchmarks (for Series B), with an added spread as specified at issuance.
Investors will receive official notification of these rates on the same day, July 16, 2025.
Action Required: Instructions for Shareholders
Shareholders wishing to exercise their right to convert between the Series A and Series B Shares must take action during the conversion notice period, which runs from July 16, 2025, through 5:00 p.m. EDT on July 31, 2025.
To complete the conversion:
- Shareholders must contact their broker, financial advisor, or nominee as early as possible to ensure timely processing of the conversion request.
- It is critical that conversion notices are properly submitted before the July 31 deadline. Any notices received after 5:00 p.m. EDT on July 31 will be considered invalid.
- Shareholders who take no action by the deadline will retain their existing series and will be subject to the applicable dividend rate for the next term (fixed or floating, depending on the share series).
