Exhibit H
H Form of Notice
1. News Digest
ALLEGHENY ENERGY, INC., ET AL. A notice has been issued
giving interested persons until February __, 2001, to request a
hearing on a proposal by Allegheny Energy, Inc. ("Allegheny"), a
registered holding company, Allegheny Energy Service Corporation
("AESC"), a wholly owned service subsidiary of Allegheny, and
Allegheny Ventures, Inc. ("Allegheny Ventures"), a wholly owned
non-utility subsidiary of Allegheny to acquire 100% of the issued
and outstanding common stock of Leasing Technologies
International, Inc. ("Leasing Technologies"). (Rel. 35-27____).
2. Notice
Allegheny Energy, Inc. et al. (70-1______)
Allegheny Energy, Inc. ("Allegheny"), a registered holding
company, and Allegheny Energy Service Company, a service
subsidiary of Allegheny, and the Allegheny Ventures, Inc.
("Allegheny Ventures"), a wholly owned non-utility subsidiary of
Allegheny, all located at 10435 Downsville Pike, Hagerstown, MD
21740-1766, (collectively, "Applicants"), have filed an
application-declaration under sections Sections 6(a), 7, 9(a), 10,
11, 12(b) and 13(b) of the Public Utility Holding Company Act of
1935, as amended ("Act"), and Rules 45, 46, 53, 54, 90 and 91
under the Act.
Allegheny Ventures has entered into a Stock Purchase
Agreement ("Stock Purchase Agreement") to acquire 100% of the
issued and outstanding common stock of Leasing Technologies
International, Inc. ("Leasing Technologies").<F1> The purchase price
(the "Purchase Price") for all of the issued and outstanding
common stock shall be in an aggregate amount not to exceed the
equivalent value of Allegheny common stock equal to
$42,085,482.00, subject to certain elections and adjustments as
set forth in the Stock Purchase Agreement, plus a de minimus
amount of cash payable for any fractional shares. The Transaction
will be accounted for as a purchase. Specifically, by this
application-declaration, subject to the terms and conditions
described herein, Applicants seek authority for:
Allegheny Ventures to acquire 100% of the issued and
outstanding common stock of Leasing Technologies from the owners
of that common stock ("Sellers");
Allegheny to issue shares of Allegheny common stock, in a
number to be determined pursuant to the Stock Purchase Agreement,
to the Sellers or their agents;
Allegheny Ventures to assume up to $85 million in existing
debt held by Leasing Technologies;
<F1> See Exhibit A-1, Stock Purchase Agreement.
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Allegheny Ventures or Allegheny to make capital and operating
contributions to Leasing Technologies in the form of loans,
guarantees, advances, or equity contributions up to an aggregate
amount not to exceed $100 million through December 31, 2004;
Leasing Technologies to provide financing and leasing
services to Allegheny Ventures' industrial and commercial
customers for energy related equipment and telecommunications
equipment - including providing ancillary products and services in
a de minimus amount - without regard to the customer's location;
Leasing Technologies to enter into a service agreement with
AESC;<F2> and, to authorize
Leasing Technologies to exceed the 50% limitation in
financing and leasing activities to associated companies; and,
Leasing Technologies to maintain a 90/10 debt to equity ratio for
Leasing Technologies and have it deemed to be 70/30 for purposes
of Allegheny's consolidated debt/equity requirements
(collectively, the "Transaction").<F3>
Collectively, Leasing Technologies' senior management and
employees own approximately 56.31% of the outstanding common stock
of Leasing Technologies. The 43.69% held by the non-management /
non-employee shareholders is payable in Allegheny common stock at
the closing of the Transaction. Management and employee
shareholders will be paid out of the escrow account over a period
of three years. At the end of each of the three (3) calendar
years following the closing of the Transaction the management and
employee shareholders will receive a baseline amount or the
baseline plus additional amounts pursuant to the Stock Purchase
Agreement. All consideration will be payable in Allegheny common
stock.<F4>
Allegheny is a diversified energy company, headquartered in
Hagerstown, Maryland. The Allegheny system consists of three
regulated electric public utility companies, one public utility
natural gas company, an electric generating company, and a non-
utility non-regulated subsidiary. The electric utilities are West
Penn Power Company ("West Penn"), Monongahela Power Company
("Monongahela Power") (Monongahela Power also has a regulated
natural gas utility division as a result of its purchase of West
Virginia Power), and The Potomac Edison Company ("Potomac
Edison"). In addition to having a gas division Monongahela Power
has a wholly owned subsidiary, the Mountaineer Gas Company, which
is a regulated public utility natural gas company, (all
collectively d/b/a "Allegheny Power"). Allegheny Power delivers
electric energy to about three million people or 1.6 million
customers in parts of Maryland, Ohio, Pennsylvania, Virginia, and
West Virginia and natural gas to about 230,000 customers in West
Virginia. Allegheny Energy Supply Company, L.L.C. ("AE Supply")
is the electric generating company for the Allegheny system. AE
Supply owns, operates and markets competitive retail and wholesale
<F2> See Exhibit A-2, Form Service Agreement.
<F3> In the event this Commission deems this Transaction not to
satisfy the Commission's standards as discussed in Item 3,
Applicants request Commission approval of this Transaction on the
basis that it is a de minimus investment taking into account the
fact that the Transaction when viewed in the context of its
relative size and impact on Allegheny as a whole will have a de
minimus impact both in terms of monetary size and risk exposure.
See, infra page 7 (discussion of alternate approval request).
<F4> Any fractional shares resulting from application of the above
calculations will be payable in cash.
<PAGE>
electric generation. AE Supply also manages and operates electric
generation owned by the regulated utilities d/b/a Allegheny Power
that has not yet been deregulated. Allegheny Ventures, Inc., a
non-utility non-regulated subsidiary of Allegheny, actively
invests in and develops energy-related projects through its wholly
owned subsidiary Allegheny Energy Solutions. Additionally,
Allegheny Ventures invests in and develops telecommunications
projects through Allegheny Communications Connect, Inc., an exempt
telecommunications company under the Act. For the twelve months
ended September 30, 2000, Allegheny's gross revenues and net
income were approximately $3.524 billion and $188 million,
respectively.
Leasing Technologies is a privately held leasing and
financing company formed in 1983. It is headquartered in Wilton,
Connecticut, with offices in Philadelphia, Boston, Atlanta, San
Francisco, and Los Angeles.<F5> Leasing Technologies provides
financial services to entities primarily involved in technology or
information services companies specializing in providing financing
to entities engaged in telecommunications, biotechnology,
healthcare, software, internet, and other technologies. Leasing
Technologies offers a variety of equipment financing and leasing
services focusing primarily on short-term fair market value leases
ranging from 18 to 48 months. Leasing Technologies also has a
division that focuses primarily on young venture capital-backed
companies in the technology, information services, software,
telecommunications and life science markets. Since its inception
Leasing Technologies has written equipment leases and loans
totaling over $250 million. Leasing Technologies presently serves
over two hundred (200) customers in a variety of industries
throughout the United States. For the twelve months ending
September 30, 2000, Leasing Technologies had revenues of
approximately $19.8 million and net income of $2.0 million.
By this Transaction, Applicants propose to focus and expand
the scope and breadth of financing and services to include the
leasing and financing of energy related, telecommunications,
information technology, and distributed generation equipment,
along with ancillary products and services. Allegheny and
Allegheny Ventures are committed to growing the unregulated
portion of the businesses, the ability to provide a comprehensive
financial solution for the Allegheny system's telecommunications,
distributed generation and core utility customers is a crucial
component of this strategy. Leasing Technologies will be the
financial platform to provide a comprehensive financial solution.
Applicants are fully committed to supporting Leasing Technologies
to achieve the planned business objectives.
<F5> Leasing Technologies has two wholly owned subsidiaries: LTI
Portfolio Management Corp., and LTI Lease Corp. Additionally,
Atlantic Computer Funding Corporation, Inc., a New York
corporation, is an affiliate of Leasing Technologies due to the
fact that George A. Parker, Executive Vice President of Leasing
Technologies, owns 100% of Atlantic's stock. In turn Atlantic
owns 100% of LTI Funding. Both Atlantic Computer and LTI Funding
are inactive.
