Tejon Ranch Co. near Lebec announced it raised an estimated $90 million from its recent stockholders’ rights offering to help fund its proposed housing and commercial communities.
The real estate and agribusiness company, which owns 270,000 acres about 60 miles north of the city of Los Angeles, said the amount, while still preliminary, is the maximum amount it could have raised from the offering. The offering ended Oct. 27.
Tejon had offered stockholders of record as of Oct. 4 transferable rights to purchase 4,173,067 shares of common stock for $18 a share. For each right, stockholders could buy 0.20 shares, and the right also included an over-subscription privilege. Under the offering, Tejon could also issue another 833,333 shares for over-subscription requests.
As a result, Tejon’s expected $90 million includes its release of 826,933 in over-allotment shares. Tejon will also issue 5 million new shares of common stock due to the offering, the company said.
In addition, 25,873,235 shares of common stock will be outstanding once all new shares are delivered, the company said.
A rights’ offering gives eligible stockholders the chance to take part in the process of raising capital on a pro rata basis and minimizes the dilution of their ownership interest in a company, Tejon Ranch explained.
The company plans to use proceeds for general corporate purposes and to continue to develop its Tejon Ranch Commerce Center logistics park, for entitling and permitting the proposed communities Centennial at Tejon Ranch and Grapevine at Tejon Ranch, and to prepare Mountain Village at Tejon Ranch for development.
The three housing communities would potentially add nearly 35,000 residential units and more than 15 million square feet of commercial space across its properties. One is in L.A. County while two are in Kern County.
Tejon announced the estimated results Monday. On Tuesday, Tejon Ranch (TRC) shares closed down 45 cents, or 2.3 percent, to $18.85 on the New York Stock Exchange.