Please ensure Javascript is enabled for purposes of website accessibility

Why Just Energy Group Spiked Over 100% Today

By Howard Smith – Sep 17, 2020 at 12:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The retail energy provider announced an update on its recapitalization plan.

What happened

Shares of Just Energy Group (JE -3.17%) more than doubled this morning, before settling back to a gain of 34% as of 11:50 a.m. EDT. The Canadian energy solutions company provided an update that investors found favorable. 

So what 

Just Energy announced it is one step away from closing its recapitalization plan. It said it is only awaiting final approval by the Federal Energy Regulatory Commission (FERC), the U.S. agency that regulates the transmission and sale of electricity and natural gas in interstate commerce. 

digital view of a home showing computerized home energy solution

Image source: Getty Images.

The company believes its plan will allow it to continue operating as an independent company and will result in sustainable growth. It announced its plan in July 2020, aiming to de-risk the business and add financial flexibility. 

Now what 

The company's "plan of arrangement" has received all necessary stakeholder approvals as well as a final order to proceed from an Ontario court. The plan includes converting about $320 million in convertible debt and preferred shares into equity, a new $75 million equity investment, and the extension of the due date for about $410 million in debt and credit facilities. 

The company says it will "materially" save on annual interest payments, adding flexibility as well as liquidity. It will also revamp its board of directors and include at least four new directors. 

Just Energy said business will continue normally for its employees, customers, and suppliers. Investors bid up shares in acknowledgement that the company should be able to continue to successfully operate and grow its business. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Just Energy Group Stock Quote
Just Energy Group
$0.06 (-3.17%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.