-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, eF28cROgGTaAiC3ex5qBHba6440k4vZJ3t8q4Js0zl2e9C74Eqi+NjmzSeqGVkNS QUSH8aUsY/JKNQiE4c7cbw== 0000092122-95-000063.txt : 19950620 0000092122-95-000063.hdr.sgml : 19950620 ACCESSION NUMBER: 0000092122-95-000063 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19950619 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CO CENTRAL INDEX KEY: 0000092122 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 580690070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: 1935 Act SEC FILE NUMBER: 070-08421 FILM NUMBER: 95547774 BUSINESS ADDRESS: STREET 1: 64 PERIMETER CTR EAST CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 4043930650 POS AMC 1 AMENDMENT NO. 3 (POST-EFFECTIVE NO. 1) File No. 70-8421 SECURITIES AND EXCHANGE COMMISSION Washington, D. C 20549 Amendment No. 3 (Post-Effective No. 1) FORM U-1 APPLICATION OR DECLARATION under The Public Utility Holding Company Act of 1935 THE SOUTHERN COMPANY 64 Perimeter Center East Atlanta, Georgia 30346 (Name of company or companies filing this statement and addresses of principal executive offices) THE SOUTHERN COMPANY (Name of top registered holding company parent of each applicant or declarant) Tommy Chisholm, Secretary The Southern Company 64 Perimeter Center East Atlanta, Georgia 30346 (Names and addresses of agents for service) The Commission is requested to mail signed copies of all orders, notices and communications to: W. L. Westbrook John D. McLanahan Financial Vice President Troutman Sanders The Southern Company 600 Peachtree Street, N.E. 64 Perimeter Center East Suite 5200 Atlanta, Georgia 30346 Atlanta, Georgia 30308-2216 INFORMATION REQUIRED Item 1. Description of Proposed Transaction. 1.1 Background. The Southern Company ("Southern") is a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"). By order dated August 3, 1994 (HCAR No. 26096) (the "1994 Order"), Southern was authorized to acquire, in one or more transactions, the securities of one or more companies organized to engage directly or indirectly, and exclusively, in the business of owning and holding the securities of one or more "foreign utility companies" ("FUCOs"), as defined in Section 33(a) of the Act. Such companies (referred to as "Project Parents") may also acquire and hold the securities of one or more "exempt wholesale generators" ("EWGs"), as defined in Section 32(a) of the Act. Under the terms of the 1994 Order, Southern was authorized to make direct or indirect investments in Project Parents in an aggregate amount at any one time outstanding not to exceed $400 million, provided, however, that any direct or indirect investment by Southern in any Project Parent would be consummated only if, at the time thereof, and giving effect thereto, Southern's "aggregate investment," determined in accordance with Rule 53(a)(1)(i), in all FUCOs, EWGs and Project Parents would not exceed 50% of Southern's "consolidated retained earnings," as defined in Rule 53(a)(1)(ii). The 1994 Order includes other limitations and qualifications applicable to the types and terms of investments by Southern in Project Parents. - 2 - At March 31, 1995, Southern had invested approximately $38.3 in Project Parents; and, for the four consecutive quarters then ended, its "aggregate investment" in all EWGs, FUCOs and Project Parents was approximately $500.1 million, or about 15.9% of Southern's "consolidated retained earnings," determined in accordance with Rule 53(a). Under the 1994 Order, the Commission also gave approval for any Project Parent to issue equity securities and debt securities to persons other than Southern (and with respect to which there is no recourse to Southern), including banks, insurance companies, and other financial institutions, exclusively for the purpose of financing (including any refinancing of) investments in EWGs and FUCOs, subject to specified conditions, restrictions and limitations on the terms of such securities. Among other limitations contained in the 1994 Order, the principal amount of non-recourse debt securities issued by Project Parents to persons other than Southern may not exceed $800 million at any one time outstanding, of which no more than $200 million principal amount at any time outstanding may be denominated in (i.e., evidence borrowings in) currencies other than U.S. dollars.1 1 The order states that, in any case in which Southern directly or indirectly owns less than all of the equity interests of a Project Parent, only that portion of the non-recourse indebtedness of such Project Parent equal to Southern's equity ownership percentage shall be included for purposes of these limitations. - 3 - 1.2 Proposed Modifications to 1994 Order. Southern now requests a further order of the Commission modifying the 1994 Order in the following respects: First, Southern proposes that the authorization period be extended one year to the earlier of (i) December 31, 1997, and (ii) the effective date of any rule of general applicability adopted by the Commission that would exempt the issuance of securities by any Project Parent and the acquisition thereof by a registered holding company from the provisions of Sections 6, 7, 9, and 10 of the Act. Second, Southern requests authority to make direct or indirect investments in Project Parents in an aggregate amount which, when added to Southern's "aggregate investment" at any point in time in all EWGs, FUCOs, and Project Parents, does not exceed the greater of (x) $1.072 billion, and (y) 50% of Southern's "consolidated retained earnings," determined in accordance with Rule 53(a) (hereinafter, the "Rule 53 Limitation"). The current Rule 53 Limitation ($1.072 billion) is based on Southern's "consolidated retained earnings" and "aggregate investment" at March 31, 1995, as shown in Item 1.3, below. Third, Southern seeks authority for Project Parents to issue debt securities to persons other than Southern (and with respect to which there is no recourse to Southern) in an aggregate principal amount at any time outstanding not to exceed $1 billion, of which not more than $750 million principal amount - 4 - at any time outstanding may be denominated in (i.e., evidence borrowings in) currencies other than U.S. dollars. Except as specifically noted above, no other modifications to the terms, conditions, limitations and restrictions set forth in the 1994 Order are proposed herein. 1.3 Compliance with Rules 53. As indicated, Southern is herein requesting authority to make investments in Project Parents from time to time in an aggregate amount which at no time exceeds the Rule 53 Limitation. Under Rule 53, the Commission shall not make certain specified findings under Sections 7 and 12 in connection with a proposal by a holding company or subsidiary thereof to issue securities for the purpose of acquiring the securities of or other interest in any EWG, or to guarantee the securities of any EWG, if each of the conditions in paragraphs (a)(1) through (a)(4) thereof are met, provided that none of the conditions specified in paragraphs (b)(1) through (b)(3) of Rule 53 exists. In that regard, Southern states that, giving effect to the proposals made herein, all of the conditions set forth in Rule 53(a) are and will be satisfied and none of the conditions set forth in Rule 53(b) exists or, as a result thereof, will exist. Rule 53(a)(1): At March 31, 1995, Southern had invested, directly or indirectly, an aggregate of $500.1 million in EWGs and FUCOs, inclusive of indirect investments through - 5 - Project Parents.2 The average of the consolidated retained earnings of Southern reported on Form 10-K or Form 10-Q, as applicable, for the four consecutive quarters ended March 31, 1995, is $3.144 billion. Accordingly, based on Southern's "consolidated retained earnings" at March 31, 1995, the current Rule 53 Limitation is about $1.072 billion, calculated as follows: 50% of "consolidated retained earnings" ($1.572 billion) less "aggregate investment" at March 31, 1995 ($500.1 million) equals $1.072 billion. Rule 53(a)(2): Southern maintains books and records enabling it to identify investments in and earnings from each EWG and FUCO in which it directly or indirectly holds an interest. In addition, each domestic EWG in which Southern holds an interest maintains its books and records and prepares its financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"). The books and records and financial statements of each FUCO in which Southern holds an interest (including those that are "majority-owned subsidiaries" and one which is not) are maintained and prepared in conformity with GAAP. All of such books and records and financial statements will be made available to the Commission, in English, upon request. Rule 53(a)(3): No more than 2% of the employees of Southern's operating utility subsidiaries will, at any one time, 2 These investments are in EWGs operating or constructing facilities in Hawaii, Virginia and Trinidad and Tobago, and FUCOs operating facilities in Chile, Argentina and The Bahamas. - 6 - directly or indirectly, render services to EWGs and FUCOs. Based on current staffing levels of Southern's domestic operating utility subsidiaries (such companies currently employ, in the aggregate, approximately 27,000 salaried and hourly employees), no more than 540 employees of these companies, in the aggregate, determined on a full-time-equivalent basis, will be utilized at any one time in rendering services directly or indirectly to EWGs and FUCOs. In a separate proceeding (File No. 70-7932), certain of Southern's operating utility subsidiaries have been authorized to render services to EWGs and FUCOs indirectly through Southern Electric International, Inc. Rule 53(a)(4): Southern is simultaneously submitting a copy of this Post-Effective Amendment, and will submit copies of any Rule 24 certificates required hereunder, as well as a copy of Southern's Form U5S, to the Federal Energy Regulatory Commission and to each of the public service commissions having jurisdiction over the retail rates of Southern's operating utility subsidiaries. In addition, Southern states that the provisions of Rule 53(a) are not made inapplicable to the authorization herein requested by reason of the provisions of Rule 53(b). Rule 53(b)(1): Neither Southern nor any subsidiary of Southern is the subject of any pending bankruptcy or similar proceeding. Rule 53(b)(2): Southern's average consolidated retained earnings for the four most recent quarterly periods ($3.144 - 7 - billion) represents an increase of approximately $69 million in the average consolidated retained earnings for the previous four quarterly periods ($3.075 billion). Rule 53(b)(3): In the previous fiscal year, Southern did not report any operating losses attributable to its direct or indirect investments in EWGs and FUCOs. 1.4 Source of Funds for Proposed Investments. Funds for any direct or indirect investment by Southern in any Project Parent (including the guaranty of any securities of any Project Parent) will be derived from the sale of common stock and/or the issuance of guarantees (within such limitations as are set forth in orders issued in File Nos. 70-8277 and 70-8435 or in any future proceedings), from bank borrowings and/or commercial paper sales (within such limitations as are set forth in orders issued in File No. 70-8309 or in any future proceedings), and from available cash. Item 2. Fees, Commissions and Expenses. The additional fees, commissions and expenses paid or to be incurred in connection with this Post-Effective Amendment are estimated not to exceed $1,000. Item 3. Applicable Statutory Provisions. Southern considers that the issuance of securities by any Project Parent and the direct or indirect acquisition thereof by Southern are subject to Sections 6(a), 7, 9(a) and 10 of the Act and Rules 42 and 53 thereunder. Sections 6(a) and 7 may also - 8 - be applicable to the liquidation or dissolution of any Project Parent. In addition, Section 12(b) and Rules 45 and 53 thereunder would apply to any direct or indirect cash capital contribution or loan by Southern to any Project Parent and to the guaranty by Southern of any security of any Project Parent. Southern proposes to combine the information included in Rule 24 certificates filed in accordance with the requirements of the 1994 Order with the quarterly certificates to be filed pursuant to Rule 24 in accordance with the Commission's order approving the Application or Declaration of Southern and SEI in File No. 70-7932. (See HCAR No. 26212, dated December 30, 1994). Item 4. Regulatory Approval. The direct or indirect acquisition by Southern of the securities of any Project Parent and the issuance of securities by any such Project Parent are not subject to the jurisdiction of any state commission or of any federal commission other than the Securities and Exchange Commission. Item 5. Procedure. Southern requests that the Commission's order be issued as soon as the rules allow, and that there be no thirty-day waiting period between the issuance of the Commission's order and the date on which it is to become effective. Southern hereby waives a recommended decision by a hearing officer or other responsible officer of the Commission and hereby consents that the Division of Investment Management may assist in the - 9 - preparation of the Commission's decision and/or order in this matter unless such Division opposes the matters covered hereby. Item 6. Exhibits and Financial Statements. (a) Exhibits: (Supplemental List). F-1 - Opinion of Troutman Sanders. (To be filed by amendment). G-1 - Form of Federal Register Notice. (b) Financial Statements: (Inapplicable). Item 7. Information as to Environmental Effects. (a) The Commission's action in this matter will not constitute any major federal action significantly affecting the quality of the human environment. (b) No other federal agency has prepared or is preparing an environmental impact statement with regard to the proposed transactions. - 10 - SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this statement to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 19, 1995 THE SOUTHERN COMPANY By:/s/Tommy Chisholm Tommy Chisholm, Secretary EX-99 2 EXHIBIT G-1 Exhibit G-1 FORM OF FEDERAL REGISTER NOTICE The Southern Company, a registered holding company, has filed a post-effective amendment to its application or declaration heretofore approved pursuant to Sections 6(a), 7, 9(a), 10, 12(b), 32 and 33 of the Act and Rules 42, 45, and 53 thereunder. By order dated August 3, 1994 (HCAR No. 26096) (the "1994 Order"), Southern was authorized to acquire, in one or more transactions, the securities of one or more companies (referred to as "Project Parents") organized to engage exclusively in the business of owning and holding the securities of one or more "exempt wholesale generators" and "foreign utility companies." Subject to various conditions and limitations, the 1994 Order authorized Southern to make investments in Project Parents in an aggregate amount not to exceed $400 million at any time outstanding, and Project Parents to incur indebtedness for which there is no recourse to Southern in an aggregate principal amount not to exceed $800 million at any time outstanding. Southern is now seeking approval to acquire the securities of and make other investments in Project Parents in one or more transactions through December 31, 1997, in an aggregate amount which, when added to Southern's "aggregate investment" (as defined in Rule 53) in all "exempt wholesale generators," "foreign utility companies," and Project Parents (which was approximately $500.1 million at March 31, 1995) would not exceed the greater of (i) $1.072 billion, and (ii) 50% of Southern's "consolidated retained earnings," as defined in Rule 53(a). At March 31, 1995, 50% of Southern's "consolidated retained earnings" was about $1.572 billion. Southern also proposes that Project Parents may issue debt securities to persons other than Southern (and with respect to which there is no recourse to Southern) from time to time through December 31, 1997, in an aggregate principal amount not to exceed $1 billion at any time outstanding, of which not more than $750 million may be denominated in non-U.S. currencies. -----END PRIVACY-ENHANCED MESSAGE-----