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Energy firms selling shares
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December 20, 2001: 12:08 p.m. ET
Dynegy, Mirant offer stock in effort to cut debt in wake of Enron's collapse.
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NEW YORK (CNN/Money) - Dynegy Inc., which saw its offer to buy troubled competitor Enron Corp. collapse last month, raised $494 million in a secondary stock offering it said was made partly in response to Enron's woes.
Proceeds of the offering will be used to reduce debt. The offering originally had been planned for the middle of next year but was moved up as "an important next step in the execution of our strategy to strengthen Dynegy's financial position in light of the changing financial standards in the energy merchant industry," Dynegy CEO Chuck Watson said.
Dynegy (DYN: down $0.98 to $23.00, Research, Estimates) priced the 25 million new shares at $20.75. It also said the earlier-than-expected offering will cut its earnings per share guidance for 2002 to $2.30, rather than its earlier range of $2.30 to $2.35. Analysts surveyed by earnings tracker First Call forecast EPS of $2.34 next year.
It was the second warning of the week from Dynegy, which announced plans to restructure its business and cut its 2002 EPS guidance from $2.50 to $2.60 Monday.
Shares of Dynegy were trading lower but above the offer price late Tuesday morning.
The move is just one of a series made by energy companies this week to shore up their balance sheets in the wake of the Dec. 2 bankruptcy filing by Enron (ENE: down $0.03 to $0.41, Research, Estimates).
Mirant Corp. (MIR: down $2.67 to $13.40, Research, Estimates) also made a secondary offering Thursday that raised $759 million. It said strong demand for the shares led it to increase the size of the offering to 60 million shares from earlier plans of 40 million. It priced the offering at $13.70 a share. Shares Mirant were off Thursday, trading slightly below the offering price.
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Calpine Corp. (CPN: down $0.24 to $14.45, Research, Estimates), which Monday saw its debt downgraded to junk-bond status, announced Wednesday it had sold $1 billion of notes that can be converted to common stock.
Wednesday, Williams Cos. (WMB: unchanged at $24.70, Research, Estimates) announced plans to issue $1 billion in convertible preferred securities early next year, and said it also would cut capital spending and sell non-core assets to strengthen its balance sheet.
Click here for special report on Enron's collapse
Enron's bankruptcy followed questions about limited partnerships which kept large amounts of debt off its balance sheet. Those questions eventually led to restatement of past results, a write-down of shareholder equity and a downgrade in its credit status in advance of its bankruptcy filing.
Since the collapse, new attention has been focused on the balance sheets of major energy trading companies. 
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