Icahn Enterprises L.P. said Tuesday its board has approved a rights offering that aims to raise about $600 million. The investing arm of billionaire Carl Icahn said the offering aims to enhance its depositary unit holder equity, improve its credit ratings and raise equity capital for general partnership purposes. Last May, Standard & Poor's lowered the company's credit rating to BB, placing it in speculative, or "junk" status. The rating agency cited the firm's weak investment performance and high borrowing levels as motives for the move. Icahn Enterprises said it will distribute freely-tradable rights on a pro rata basis to holders of record as of close of business on a record date that has yet to be decided. The rights will allow a unit holder to acquire a newly-issued depositary unit of Icahn Enterprises at an exercise price that is also yet to be determined. Icahn owns about 90% of the company's outstanding depositary units and has told the company that certain of his affiliates will fully exercise all basic rights allocated in the offering. IEP shares were not yet active premarket, but are up just 2.9% in the last year, while the S&P 500 has gained 18%.
Copyright © 2017 MarketWatch, Inc.
Continue Reading Below