The Atlas Arteria Group (ASX: ALX) share price is withstanding today's sell off for a good reason. It's still in a trading halt.
Indeed, the stock hasn't gone anywhere today as the company undergoes a $3.098 billion capital raise to fund its acquisition of a majority stake in the Chicago Skyway.
The S&P/ASX 200 Index (ASX: XJO) toll road operator is selling shares for $6.30 apiece under a 1 for 1.95 entitlement offer.
The Atas Arteria share price last traded on Monday, closing at $7.81.
Let's take a closer look at what's happening with the approximately $7.5 billion company.
Atlas Arteria share price frozen amid $3b capital raise
The Atlas Arteria share price remains in the freezer on Wednesday as the company undergoes a massive capital raise to fund its $2.9 billion acquisition.
The near-$3.1 billion capital raise will see the company issuing 491.8 million new shares – representing 51.3% of its shares on issue. Newly issued shares won't be eligible for the company's upcoming 20-cent dividend.
The raise will be made up of an institutional entitlement offer that will be conducted today and tomorrow.
Following that, a retail entitlement offer will open on 21 September before closing on 6 October.
New dividend guidance
The company also reaffirmed and added to its dividend guidance. The company expects to pay out 40 cents per share in 2022 and the same amount in 2023. It says that's "a sustainable level going forward".
It expects future dividends to be supported by periodic capital releases from Skyway, given its "considerable debt capacity".
The company anticipates it will receive at least US$230 million in capital releases from Skyway over the next two years. That represents approximately 23 cents per share.
On top of that, there's the potential to regear every four to five years as coverage ratios increase while maintaining headroom to investment-grade credit metrics.
Atlas Arteria expects to behold proceeds from capital releases on its balance sheet before distributing them gradually to shareholders over time to smooth dividends.
