SECURITIES AND EXCHANGE COMMISSION
(the Commission)
Washington, D.C. 20549
FORM U-1
APPLICATION/DECLARATION
WITH RESPECT TO CERTAIN TRANSACTIONS
UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 (the Act)
MONTAUP ELECTRIC COMPANY
P.O. Box 2333, Boston, Massachusetts 02107
EASTERN EDISON COMPANY
750 West Center Street, West Bridgewater, Massachusetts 02379
(Name of companies filing this statement
and addresses of their principal executive offices)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company parent
of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies of all
orders, notices and communications to:
ARTHUR I. ANDERSON, P.C.
McDermott, Will & Emery
75 State Street
Boston, Massachusetts 02109-1807
DESCRIPTION OF PROPOSED TRANSACTIONS.
A. Introduction.
Eastern Edison Company ("Eastern Edison") and Montaup Electric Company
("Montaup") each hereby request authorization to redeem or repurchase in one or
more transactions, up to $50,000,000 in the case of Eastern Edison and
$235,000,000 in the case of Montaup of any combination of debt or classes or
series of their respective capital stock held by affiliates in order to reduce
their respective total capitalization to an appropriate level for their reduced
scale of operations as a result of industry restructuring and Montaup's
divestiture of generation assets. For the same purposes, Eastern Edison and
Montaup also request authorization to pay dividends out of capital and unearned
surplus in the case of Eastern Edison, in the aggregate amount of up to
$50,000,000 and, in the case of Montaup in the aggregate amount of up to
$30,000,000.
B. Purchases and Redemptions of Securities.
Montaup proposes to redeem or acquire and retire up to an aggregate amount of
$235,000,000 of its outstanding Debenture Bonds, preferred stock or common
stock (collectively, the "Montaup Securities") from Eastern Edison from time to
time through December 31, 2003. The redemption price for Debenture Bonds will
be the principal amount thereof plus accrued interest. The repurchase price
for shares of preferred stock and common stock of Montaup will be their
original purchase price. All of the Montaup Securities are issued in the name
of, and beneficially owned by, Eastern Edison.
Montaup proposes to finance such redemptions and repurchases with (i) the
proceeds from the divestiture of its generation assets which are being sold in
accordance with applicable orders of the Federal Energy Regulatory Commission,
the Massachusetts Department of Telecommunications and Energy and the Rhode
Island Public Utilities Commission, (ii) proceeds from a possible
securitization financing or conventional financing, (iii) cash flow and (iv)
borrowings under other available credit facilities.
Eastern Edison proposes to repurchase and retire, in one or more transactions,
up to an aggregate amount of $50,000,000 of its outstanding common stock from
Eastern Utilities Associates ("EUA"), from time to time through December 31,
2003. The repurchase price for shares of common stock will be the original
issue price. Eastern Edison currently has outstanding 2,891,357 shares of
common stock, all of which are owned by EUA.
Eastern Edison proposes to finance such acquisitions with the proceeds from
cash flow and other credit facilities and the proceeds from the redemption and
repurchase of the Montaup Securities. The proceeds from the redemption and
repurchase of Montaup Securities are initially required to be deposited with
the Trustee under the Indenture of First Mortgage and Deed of Trust of Eastern
Edison dated as of September 1, 1948 (the "Eastern Indenture"). To the extent
that such proceeds are not used to redeem first mortgage bonds issued under the
Eastern Indenture, Eastern Edison will obtain their release through the use of
available bond credits, as defined in Section 8.03 of the Eastern Indenture
(the "Bond Credits"), or by the use of available net additions, as defined in
Section 8.02 of the Eastern Indenture (the "Net Additions").
C. Payment of Dividends Out of Capital and Unearned Surplus.
In order to reduce their respective capitalizations to an appropriate level in
light of industry restructuring and Montaup's generation assets divestiture, it
may also become necessary or desirable for Eastern Edison and Montaup to pay
dividends out of capital and unearned surplus. Accordingly, Eastern Edison
requests authorization to pay dividends up to an aggregate amount of
$50,000,000 out of capital and unearned surplus and Montaup requests
authorization to pay dividends up to an aggregate amount of $30,000,000 out of
capital and unearned surplus.
D. Conclusion.
Eastern Edison and Montaup desire the authority to engage in the proposed
transactions, which are part of a larger series of transactions whereby Eastern
Edison will seek to (i) reduce its outstanding indebtedness to an amount that
will result in an appropriate debt/equity ratio following Montaup's generation
assets divestiture, (ii) eliminate Eastern Edison's preferred stock or reduce
the number of shares outstanding through negotiated repurchases or an issuer
tender offer, (iii) reduce Montaup's common equity through repurchases from
Eastern Edison or dividends, (iv) reduce Eastern Edison's common equity through
repurchase from EUA or dividends, and (v) repay short term indebtedness.
FEES, COMMISSIONS AND EXPENSES.
The estimated fees, commissions and expenses to be paid or incurred
directly or indirectly in connection with the proposed transactions will be
supplied by amendment.
APPLICABLE STATUTORY PROVISIONS.
Transaction Applicable Sections
Purchases of common stock by Section 12(c); Rule 42;
Eastern Edison; redemption of
Montaup Securities by Montaup
Payment of dividends out of Section 12(c); Rule 46
capital and unearned surplus by
Eastern Edison or Montaup.
ITEM 4. REGULATORY APPROVAL.
No State commission nor any Federal commission, other than the Commission,
has jurisdiction over any of the proposed transactions.
ITEM 5. PROCEDURE.
(a) It is requested that this declaration be granted and made effective at
the earliest convenient date.
(b) It is not considered necessary that there be a recommended decision by
a hearing officer or by any other responsible officer of the
Commission. The Office of Public Utility Regulation may assist in the
preparation of the Commission's decision and it is believed that a 30-
day waiting period between the issuance of the Commission's order and
the date on which it is to become effective would not be appropriate.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
Exhibits (* denotes filed herewith)
Exhibit A-1 Articles of Organization of Eastern Edison, as amended (Exhibit
1, Registration No. 2-7649; December, 1957, Exhibit A,
Amendment No. 1 to Form 8-K for June, 1958, Exhibit A,
Amendment No. 1 to Form 8-K for April, 1959, Exhibits A and B,
Form 8-K for July, 1961, and Exhibit A, Form 8-K for October,
1963, File No. 0-8480; Exhibit E to Certificate of
Notification, File No. 7-5379; Exhibit A, Form 8-K for April,
1975, File No. 0-8480; Exhibit A-3(a), Form U-1, File No. 70-
5719, Exhibit A, Form 8-K for September, 1976, and Exhibit 1,
Form 10-K for 1977, File No. 0-8480; Exhibit A-2(a), Form U-1,
File No. 70-6217; Exhibit 4 to Form U5S of Eastern Utilities
Associates for 1978, File No. 1- 5366; Exhibits A-2(a) and A-
2(b), Form U-1, File No. 70-6365; Exhibit 4, Form 10-K for
1979, File No. 0-8480; Exhibit C to Certificate of
Notification, File No. 70-6493; Exhibit A-3, Form U-1, File No.
70-6773).
Exhibit A-2 By-laws of Eastern Edison, as amended (Exhibit 3-2, Form 10-K
for 1980, File No. 0-8480).
Exhibit A-3 Indenture of First Mortgage and Deed of Trust of Eastern Edison
dated as of September 1, 1948 (Exhibit 4-1, Registration No. 2-
77468).
Exhibit A-4 First Supplemental Indenture dated as of February 1, 1953 of
Eastern Edison (Exhibit A, File No. 70-3015).
Exhibit A-5 Second Supplemental Indenture dated as of May 1, 1954 of
Eastern Edison (Exhibit A-3, File No. 70-3371).
Exhibit A-6 Third Supplemental Indenture dated as of June 1, 1955 of
Eastern Edison (Exhibit C to Certificate of Notification, File
No. 70-3371).
Exhibit A-7 Fourth Supplemental Indenture dated as of September 1, 1957 of
Eastern Edison (Exhibit C to Certificate of Notification, File
No. 70-3619).
Exhibit A-8 Fifth Supplemental Indenture dated as of April 1, 1959 of
Eastern Edison (Exhibit D to Certificate of Notification, File
No. 70-3798).
Exhibit A-9 Sixth Supplemental Indenture dated as of October 1, 1963 of
Eastern Edison (Exhibit F to Certificate of Notification, File
No. 70-4164).
Exhibit A-10 Seventh Supplemental Indenture dated as of June 1, 1969 of
Eastern Edison (Exhibit D, File No. 70-4748).
Exhibit A-11 Eighth Supplemental Indenture dated as of July 1, 1972 of
Eastern Edison (Exhibit C, File No. 70-5195).
Exhibit A-12 Ninth Supplemental Indenture dated as of September 1, 1973 of
Eastern Edison (Exhibit C to Certificate of Notification, File
No. 79-5379).
Exhibit A-13 Tenth Supplemental Indenture dated as of October 1, 1975 of
Eastern Edison (Exhibit C to Certificate of Notification, File
No. 70-5719).
Exhibit A-14 Eleventh Supplemental Indenture dated as of January 1, 1979 of
Eastern Edison (Exhibit 5-24, File No. 2-65785).
Exhibit A-15 Twelfth Supplemental Indenture dated as of October 1, 1980 of
Eastern Edison (Exhibit F to Certificate of Notification, File
No. 70-6463).
Exhibit A-16 Thirteenth Supplemental Indenture dated as of July 1, 1981 of
Eastern Edison (Exhibit C to Certificate of Notification, File
No. 70-6608).
Exhibit A-17 Fourteenth Supplemental Indenture dated as of June 1, 1982 of
Eastern Edison (Exhibit 4-15 Registration No. 2-77468).
Exhibit A-18 Fifteenth Supplemental Indenture dated as of May 1, 1983 of
Eastern Edison (Exhibit F to Certificate of Notification, File
No. 70-6851).
Exhibit A-19 Sixteenth Supplemental Indenture dated as of September 1, 1984
of Eastern Edison (Exhibit 4-31, Form 10-K of Eastern Utilities
Associates for 1985, File No. 1-5366).
Exhibit A-20 Seventeenth Supplemental Indenture dated as of July 1, 1986 of
Eastern Edison (Exhibit F to Certificate of Notification, File
No. 70-7254).
Exhibit A-21 Eighteenth Supplemental Indenture dated as of November 1, 1987
of Eastern Edison (Exhibit C to Certificate of Notification,
File No. 70-7373).
Exhibit A-22 Nineteenth Supplemental Indenture dated as of November 1, 1987
of Eastern Edison (Exhibit C to Certificate of Notification,
File No. 70-7373).
Exhibit A-23 Twentieth Supplemental Indenture of Eastern Edison dated as of
May 1, 1988 of Edison (Exhibit C to Certificate of
Notification, File No. 70-7373).
Exhibit A-24 Twenty-First Supplemental Indenture dated as of September 1,
1988 of Eastern Edison (Exhibit F to Certificate of
Notification, File No. 70-7511).
Exhibit A-25 Twenty-Second Supplemental Indenture dated as of December 1,
1990 of Eastern Edison (Exhibit 4-34 Form 10-K of Eastern
Edison for 1990 File No. 0-8480).
Exhibit A-26 Twenty-Third Supplemental Indenture dated as of July 1, 1992 of
Eastern Edison (Exhibit 4-24 to Form 10-K of Eastern Edison for
the year ended December 31, 1992, File No. 0-8480).
Exhibit A-27 Twenty-Fourth Supplemental Indenture dated as of May 1, 1993 of
Eastern Edison (Exhibit C-33 to Form U5S of EUA for the year
ended December 31, 1993).
Exhibit A-28 Twenty-Fifth Supplemental Indenture dated as of July 1, 1993 of
Eastern Edison (Exhibit C-34 to Form U5S of EUA for the year
ended December 31, 1993).
Exhibit A-29 Twenty-Sixth Supplemental Indenture dated as of September 1,
1993 of Eastern Edison (Exhibit C-35 to Form U5S of EUA for the
year ended December 31, 1993).
Exhibit A-30 Twenty-Seventh Supplemental Indenture dated as of January 1,
1998 of Eastern Edison (to be filed by amendment).
Exhibit A-31 Form of 8% Debenture Bonds Due 2000 of Montaup (Exhibit 4-10,
Registration No. 2-41488).
Exhibit A-32 Form of 8-1/4% Debenture Bonds due 2003 of Montaup (Exhibit B-
3, Form U5S of EUA for year 1973).
Exhibit A-33 Form of 14% Debenture Bonds due 2005 of Montaup (Exhibit 4-11,
Registration No. 2-55990).
Exhibit A-34 Form of 10% Debenture Bonds due 2008 of Montaup (Exhibit 5-3,
Registration No. 2-65785).
Exhibit A-35 Form of 16-1/2% Debenture Bonds due 2010 of Montaup (Exhibit 4-
11, Form 10-K of EUA for 1980, File No. 1-5366).
Exhibit A-36 Form of 12-3/8% Debenture Bonds due 2013 of Montaup (Exhibit 4-
13, Form 10-K of EUA for 1983, File No. 1-5366).
Exhibit A-37 Form of 10-1/8% Debentures due 2008 of Montaup (Exhibit 4, Form
10-Q of Eastern Edison for quarter ended September 30, 1983,
File No. 0-8480).
Exhibit A-38 Form of 9% Debenture Bonds due 2020 of Montaup (Exhibit 4-10,
Form 10-K of Eastern Edison for the year ended December 31,
1990, File No. 0-8480).
Exhibit A-39 Form of 9-3/8% Debenture Bonds due 2020 of Montaup (Exhibit 4-
11 to Form 10-K of Eastern Edison for the year ended December
31, 1990, File No. 0-8480).
Exhibit A-40 Articles of Incorporation of Montaup.
Exhibit A-41 By-laws of Montaup.
Exhibit F Opinion of counsel (to be supplied by amendment).
*Exhibit H Proposed Form of Notice.
Financial Statements. (Not applicable).
INFORMATION AS TO ENVIRONMENTAL EFFECTS.
The transactions described in Item 1 do not involve major federal action
significantly affecting the quality of the human environment. No federal
agency has prepared or is preparing an environmental impact statement with
respect to the proposed transactions.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this statement to be signed
on their behalf by the undersigned thereunto duly authorized.
EASTERN EDISON COMPANY
MONTAUP ELECTRIC COMPANY
By /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
Treasurer
DATED: September 8, 1998
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Eastern Edison and Montaup
Notice of Acquisition of Securities from Affiliates; Payment of Dividends out
of Capital and Unearned Surplus
Eastern Edison Company ("Eastern Edison"), a subsidiary of Eastern
Utilities Associates ("EUA"), a registered public utility holding company, and
Montaup Electric Company ("Montaup"), a subsidiary of Eastern Edison, have
filed an Application/Declaration pursuant to Section 12 (c) of the Public
Utility Holding Company Act of 1935 and Rules 42 and 46 thereunder (the
"Application/Declaration").
A. Introduction.
Eastern Edison Company ("Eastern Edison") and Montaup Electric Company
("Montaup") request authorization to redeem or repurchase in one or more
transactions, up to $50,000,000 in the case of Eastern Edison and $235,000,000
in the case of Montaup of any combination of debt or classes or series of their
respective capital stock held by affiliates in order to reduce their respective
total capitalization to an appropriate level for their reduced scale of
operations as a result of industry restructuring and Montaup's divestiture of
generation assets. For the same purposes, Eastern Edison and Montaup also
request authorization to pay dividends out of capital and unearned surplus in
the case of Eastern Edison, in the aggregate amount of up to $50,000,000 and,
in the case of Montaup in the aggregate amount of up to $30,000,000.
B. Purchases and Redemptions of Securities.
Montaup proposes to redeem or acquire and retire up to an aggregate amount of
$235,000,000 of its outstanding Debenture Bonds, preferred stock or common
stock (collectively, the "Montaup Securities") from Eastern Edison from time to
time through December 31, 2003. The redemption price for Debenture Bonds will
be the principal amount thereof plus accrued interest. The repurchase price
for shares of preferred stock and common stock of Montaup will be their
original purchase price. All of the Montaup Securities are issued in the name
of, and beneficially owned by, Eastern Edison.
Montaup proposes to finance such redemptions and repurchases with (i) the
proceeds from the divestiture of its generation assets which are being sold in
accordance with applicable orders of the Federal Energy Regulatory Commission,
the Massachusetts Department of Telecommunications and Energy and the Rhode
Island Public Utilities Commission, (ii) proceeds from a possible
securitization financing or conventional financing, (iii) cash flow and (iv)
borrowings under other available credit facilities.
Eastern Edison proposes to repurchase and retire, in one or more transactions,
up to an aggregate amount of $50,000,000 of its outstanding common stock from
EUA, from time to time through December 31, 2003. The repurchase price for
shares of common stock will be the original issue price. Eastern Edison
currently has outstanding 2,891,357 shares of common stock, all of which are
owned by EUA.
Eastern Edison proposes to finance such acquisitions with the proceeds from
cash flow and other credit facilities and the proceeds from the redemption and
repurchase of the Montaup Securities. The proceeds from the redemption and
repurchase of Montaup Securities are initially required to be deposited with
the Trustee under the Indenture of First Mortgage and Deed of Trust of Eastern
Edison dated as of September 1, 1948 (the "Eastern Indenture"). To the extent
that such proceeds are not used to redeem first mortgage bonds issued under the
Eastern Indenture, Eastern Edison will obtain their release through the use of
available bond credits, as defined in Section 8.03 of the Eastern Indenture
(the "Bond Credits"), or by the use of available net additions, as defined in
Section 8.02 of the Eastern Indenture (the "Net Additions").
C. Payment of Dividends Out of Capital and Unearned Surplus.
In order to reduce their respective capitalizations to an appropriate
level in light of industry restructuring and Montaup's generation assets
divestiture, it may also become necessary or desirable for Eastern Edison and
Montaup to pay dividends out of capital and unearned surplus. Accordingly,
Eastern Edison requests authorization to pay dividends up to an aggregate
amount of $50,000,000 out of capital and unearned surplus and Montaup requests
authorization to pay dividends up to an aggregate amount of $30,000,000 out of
capital and unearned surplus.
Except as described herein, no associate company or affiliate of
Eastern Edison or any affiliate of any such associate company has any material
interest, directly or indirectly, in the proposed transaction.
The application and any amendments thereto are available for public
inspection through the Commission's Office of Public Reference. Interested
persons wishing to comment or request a hearing should submit their views in
writing by __________ ____, 1998, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549, and serve a copy to the applicant at the
address specified above. Proof of service (by affidavit or, in the case of an
attorney at law, by certificate) should be filed with the request. Any request
for a hearing shall identify specifically the issues of fact or law that are
disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in this matter.
After said date, the application, as filed or as it may be amended, may be
granted.
For the Commission, by the Division of Investment Management pursuant
to delegated authority.
