NXG Cushing® Midstream Energy Fund (NYSE: SRV) Announces the Preliminary Results of its Rights Offering

Rhea-AI Summary

NXG Cushing® Midstream Energy Fund (NYSE: SRV) has announced the preliminary results of its transferable rights offering, which ran from October 23 to November 14, 2024. The oversubscribed offering allowed rights holders to subscribe for up to 1,004,176 common shares at $41.80 per share, representing 89% of the Fund's NAV at closing. The offering is expected to generate gross proceeds of approximately $42,000,000. The Fund plans to invest the net proceeds in alignment with its investment objectives and policies. Common shares will be issued after completion of shareholder payments and pro-rata allocation of oversubscription privileges.

Positive

• Successfully completed oversubscribed rights offering
• Expected to raise approximately $42 million in gross proceeds

Negative

• Potential dilution of existing shareholders due to new share issuance
• Shares offered at 11% discount to NAV

Insights

Financial Analyst

The rights offering by NXG Cushing® Midstream Energy Fund demonstrates strong investor confidence, with the offering being oversubscribed at an attractive 89% of NAV pricing. The successful raise of approximately $42 million in gross proceeds significantly bolsters the Fund's capital base for additional midstream energy investments.

The pricing at an 11% discount to NAV is particularly compelling for existing shareholders who participated, as it provides immediate accretion to NAV for those who exercised their rights. However, the dilutive effect on non-participating shareholders should be considered. The Fund's ability to deploy this capital effectively in the midstream energy sector will be important for maintaining long-term shareholder value.

DALLAS, Nov. 15, 2024 /PRNewswire/ -- The NXG Cushing^® Midstream Energy Fund (NYSE: SRV) (the "Fund") announced the preliminary results of its transferable rights offering (the "Offer").  The Offer commenced on October 23, 2024, and expired on November 14, 2024 (the "Expiration Date").  The Offer entitled rights holders to subscribe for up to an aggregate of 1,004,176 of the Fund's common shares of beneficial interest, par value $0.001 per share ("Common Shares").  The subscription price was $41.80 per Common Share and was determined based upon a formula equal to 89% of the Fund's net asset value ("NAV") per Common Share at the close of trading on the New York Stock Exchange on the Expiration Date.  The Offer was oversubscribed.  Common Shares will be issued promptly after completion and receipt of all shareholder payments and the pro-rata allocation of Common Shares in respect of the over­ subscription privilege.

Gross proceeds of the Offer are expected to be approximately $42,000,000.  The Fund intends to invest the net proceeds of the Offer in accordance with its investment objective and policies.

This document is not an offer to sell any securities and is not soliciting an offer to buy any securities in any jurisdiction where the offer or sale is not permitted. This document is not an offering, which can only be made by a prospectus. Investors should consider the Fund's investment objectives, risks, charges and expenses carefully before investing. Such information, including other information about the Fund, can be found on file with the Securities and Exchange Commission and should be read carefully before investing.

About NXG Investment Management

Cushing Asset Management, LP ("Cushing") is doing business as NXG Investment Management, providing Next Generation investment strategies to investors seeking long-term growth in companies focused on a clean and sustainable future as well as traditional and transformational infrastructure companies. Cushing is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts.

About NXG Cushing^® Midstream Energy Fund

The Fund is a non-diversified, closed-end management investment company with an investment objective to obtain a high after-tax total return from a combination of capital appreciation and current income. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in a portfolio of midstream energy investments. The Fund considers midstream energy investments to be investments that offer economic exposure to securities of midstream energy companies, which are companies that provide midstream energy services, including the gathering, transporting, processing, fractionation, storing, refining and distribution of natural resources, such as natural gas, natural gas liquids, crude oil refined petroleum products, biofuels, carbon sequestration, solar, and wind. The Fund considers a company to be a midstream energy company if at least 50% of its assets, income, sales or profits are committed to, derived from or otherwise related to midstream energy services. The Fund's Common Shares are traded on the NYSE under the symbol "SRV."

The Fund utilizes leverage as part of its investment strategy. There can be no assurance that the Fund will achieve its investment objectives.

For information about the Fund, please contact your financial advisor.

Contact:

Blake Nelson
NXG Investment Management
214-692-6334
www.nxgim.com

NOT FDIC INSURED   NO BANK GUARANTEE   MAY LOSE VALUE

 

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SOURCE Cushing® Asset Management, LP d/b/a NXG Investment Management

FAQ

What was the subscription price for SRV's rights offering in November 2024?

The subscription price was $41.80 per Common Share, set at 89% of the Fund's NAV per Common Share at the close of trading on November 14, 2024.

How many common shares were offered in SRV's rights offering?

The rights offering allowed subscription for up to 1,004,176 common shares of beneficial interest.

What were the gross proceeds expected from SRV's rights offering?

The gross proceeds from the rights offering were expected to be approximately $42,000,000.

When did SRV's rights offering expire?

The rights offering expired on November 14, 2024.