SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 1999
Exact Name of
Commission Registrant as IRS Employer Registrants'
File Specified in its State of Identification Telephone
Number Charter Incorporation Number Number
- -------------------------------------------------------------------------------
001-14786 CMP Group, Inc. Maine 01-0519429 207 623-3521
1-5139 Central Maine Power Maine 01-0042740 207 623-3521
Company
83 Edison Drive, Augusta,
Maine 04336 (Address of principal
executive offices) (zip code)
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Item 1 through Item 4. Not applicable.
Item 5. Other Events.
On April 7, 1999, Central Maine Power Company ("CMP") completed the
previously-reported $846.5 million sale of its non-nuclear generation assets to
FPL Energy, Inc., a subsidiary of FPL Group, Inc. The generation assets include
hydro, fossil and biomass generating plants with a total capacity of 1,185
megawatts. CMP is purchasing energy from the plants included in the sale under a
related agreement with FPL Energy, Inc., until March 1, 2000, the date retail
access to generation is scheduled to begin under the Maine's 1997
electric-utility restructuring legislation.
On April 12, 1999, CMP Group, Inc. ("CMP Group") issued the following release:
"CMP Group enjoys good ratings, sales boost
AUGUSTA, Maine, April 12, 1999 -- In the wake of the state-required sale of its
power plants, CMP Group's principal holding, Central Maine Power Co., is
enjoying "A" ratings on its senior debt from all three major credit-rating firms
for the first time in a quarter-century.
CMP received more than $850 million from FPL Energy on April 6 in payment for
1,185 megawatts of hydroelectric, oil-fired, and biomass generating capacity and
associated property. A closing ceremony was held in Portland on April 7 with
Governor Angus S. King as a main speaker. Noting that the asset-sale proceeds
will permit substantial reductions in CMP debt and reduce the utility's
business-risk profile, the Standard & Poor's, Moody's, and Duff & Phelps
credit-rating firms each raised their ratings of CMP debt and preferred stock in
the days preceding the closing.
CMP is redeeming $119 million of mortgage bonds from the sale proceeds. It will
also retire about $227 million of unsecured Medium-Term Notes and $10 million of
debt issued through pollution-control project bonds. CMP will also pay some $300
million of state and federal taxes from the sale proceeds. Closing costs and
energy purchases to meet supply obligations until the start of retail
competition on March 1, 2000, will absorb additional funds; the remainder will
be transferred to the CMP Group parent company.
`CMP's improved credit ratings reflect the improvement in financial health you
expect from reducing debt, and the reduction in perceived risks from owning
generation,' said CMP Group Chief Financial Officer David E. Marsh. `But the
improvement will help CMP customers as well as investors: the Maine Public
Utilities Commission has indicated that it intends to reflect these savings via
a substantial cut in CMP's authorized prices when it designs rates for March
2000 and beyond.'
Marsh said the CMP Group Board of Directors, which approved the debt redemptions
now under way, will consider uses of remaining sale proceeds, including options
such as stock repurchases.
CMP's basic electricity business improved in the first-quarter, Marsh said. The
2.32 billion kilowatt-hours sold in the first quarter were 2.2 percent above
same-period 1998 levels. Meanwhile, he added, `The ice-storm disaster of 1998
didn't repeat itself, and CMP also benefited from generally better weather,
continued savings on charges from the closed Maine Yankee nuclear plant, and
continued success in managing operations-and-maintenance costs. The increased
sales and good cost trends at CMP will significantly improve our earnings for
the first quarter of 1999.'
Marsh said completing the sale of CMP's non-nuclear generation assets to FPL
Energy had delayed the customary reporting of quarterly financial results. The
earnings release for the quarter ending March 31, 1999, is expected to be
available by April 27."
Item 6 through Item 9. Not applicable.
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This report contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. Readers are therefore urged not to place undue reliance on
such forward-looking statements. A number of factors that could cause actual
results to differ materially from those projected in this report are listed in
the Annual Report on Form 10-K of CMP Group and CMP for the year ended December
31, 1998.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CMP GROUP, INC.
By /s/ David E. Marsh___________
David E. Marsh
Chief Financial Officer
CENTRAL MAINE POWER COMPANY
By /s/ Michael W. Caron_________
Michael W. Caron
Comptroller
Dated: April 12, 1999
