SEC File No. 70-____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
(Name of company filing this statement and
address of principal executive office)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of applicant)
T.G. Howson, Vice President Douglas E. Davidson, Esq.
and Treasurer Berlack, Israels & Liberman LLP
M.A. Nalewako, Secretary 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, New Jersey 07054
_________________________________________________________________
(Names and addresses of agents for service)<PAGE>
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
A. By Order dated September 23, 1993 (HCAR No. 35-25898),
the Commission, among other things, authorized GPU Service
Corporation, a subsidiary service company ("Service Company"), to
enter into a Term Loan, Revolving Credit and Guaranty Agreement,
dated as of September 30, 1993 ("FUNB Loan Agreement"), with
First Union National Bank (successor in interest to First
Fidelity Bank, National Association, New Jersey) ("FUNB") and to
issue to FUNB its unsecured promissory notes maturing not later
than September 30, 1998, representing borrowings thereunder in
the amount of up to $16,500,000 (of which $11,500,000 constituted
a term loan and $5,000,000 a revolving credit facility which
facility has expired). The proceeds of the term loan borrowings
were used to refinance $11,500,000 of Service Company's then
outstanding indebtedness which Service Company had incurred to
finance the construction and equipping of its Parsippany, New
Jersey headquarters office building. The revolving credit
borrowings were to be used for general corporate purposes
including capital expenditures. In its September 23, 1993 Order,
the Commission further authorized GPU to unconditionally
guarantee payment of principal of and interest on the notes and
Service Company's other obligations to FUNB under the FUNB Loan
Agreement.
B. By Order dated April 24, 1986 (HCAR No. 35-24069), the
Commission, among other things, authorized Service Company to
issue to Aetna Life Insurance Company ("Aetna") $32,000,000
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aggregate principal amount of its secured notes ("Aetna Loan"),
maturing not later than December 31, 2001, secured by a first
lien and security interest in Service Company's Reading,
Pennsylvania office building. The proceeds of such borrowing
were used to repay then outstanding borrowings incurred to
finance the construction and equipping of the Reading office
building and for working capital purposes. The April 24, 1986
order also authorized GPU to guarantee Service Company's payment
of principal and interest on and performance of its other
obligations with respect to these secured notes.
C. At February 1, 1996, the principal amount of borrowings
outstanding under the FUNB Loan Agreement and Aetna Loan was
$11,500,000 and $19,200,000, respectively. The Aetna Loan bears
interest at a fixed rate of 10.87% per annum. Notes issued under
the FUNB Loan Agreement bear interest at fluctuating rates based
upon (i) FUNB's base rate, or (ii) the London Interbank Offered
Rate plus 37.5 basis points and the applicable reserve.
D. Service Company has determined that market conditions
are sufficiently favorable to warrant a refinancing of the Aetna
Loan and, possibly, at the same time a refinancing of borrowings
under the FUNB Loan Agreement as well. Accordingly, Service
Company now intends, from time to time through February 1, 2006,
to borrow up to $40,000,000 from one or more commercial banks or
other institutions under one or more new term loan and/or
revolving credit facilities (each, a "New Loan Agreement")
entered into on or before February 1, 2006. Each New Loan
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Agreement would provide for interest at negotiated market rates
but, in any case, not in excess of the greater of (i) 150 basis
points above the greater of (a) the lending bank's or other
recognized prime rate and (b) 50 basis points above the federal
funds rate, (ii) 200 basis points above the specified London
Interbank Offered Rate plus any applicable reserve requirement,
(iii) a negotiated fixed rate which, in any event, would not
exceed 300 basis points above the treasury bond rate with an
identical average life, or (iv) a rate equal to the average
domestic money bid rate for certificates of deposit of similar
maturities, plus up to 100 basis points and any applicable
reserve requirement; and would include other customary terms and
conditions. Loans under each New Loan Agreement would have a
maturity of up to 20 years and may be evidenced by promissory
notes. Proceeds of borrowings under the New Loan Agreement would
be used to repay outstanding borrowings under the Aetna Loan, and
may be used to repay all or a portion of the outstanding
borrowings under the FUNB Loan Agreement. The balance would be
used for working capital and other corporate purposes.
E. In order to enable Service Company to borrow at more
favorable rates and other terms, GPU proposes, from time to time
through February 1, 2006, to enter into guaranty agreements in
favor of the banks or other institutional lenders under the New
Loan Agreements to unconditionally guaranty payment of principal,
interest and Service Company's other obligations under the New
Loan Agreements.
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F. GPU submits that all of the criteria of Rule 54 under
the Act with respect to the proposed transactions are satisfied.
(i) The average consolidated retained earnings
for GPU and its subsidiaries, as reported for the four
most recent quarterly periods in GPU's Annual Report on
Form 10-K for the year ended December 31, 1994 and
Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995,
as filed under the Securities Exchange Act of 1934, was
approximately $1.87 billion. As of December 31, 1995,
GPU had invested, or committed to invest, directly or
indirectly, an aggregate of approximately $189.5
million in EWGs and $112 million in FUCOs, representing
approximately 16% of such average consolidated retained
earnings. GPU's aggregate investments in EWGs and
FUCOs pursuant to all outstanding or pending
authorizations will not at any time exceed the 50%
limitation in Rule 53.
(ii) GPU maintains books and records to identify
investments in, and earnings from, each EWG and FUCO in
which it directly or indirectly holds an interest. (A)
For each United States EWG in which GPU directly or
indirectly holds an interest:
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(1) the books and records for such EWG
will be kept in conformity with United States
generally accepted accounting principles ("GAAP");
(2) the financial statements will be
prepared in accordance with the GAAP; and
(3) GPU directly or through its subsid-
iaries undertakes to provide the Commission access
to such books and records and financial statements
as the Commission may request.
(B) For each FUCO or foreign EWG which is a
majority-owned subsidiary of GPU:
(1) the books and records for such
subsidiary will be kept in accordance with GAAP;
(2) the financial statements for such
subsidiary will be prepared in accordance with
GAAP; and
(3) GPU directly or through its subsid-
iaries undertakes to provide the Commission access
to such books and records and financial
statements, or copies thereof in English, as the
Commission may request.
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(C) For each FUCO or foreign EWG in which
GPU owns 50% or less of the voting securities, GPU directly
or through its subsidiaries will proceed in good faith, to
the extent reasonable under the circumstances, to cause
(1) such entity to maintain books and
records in accordance with GAAP;
(2) the financial statements of such entity
to be prepared in accordance with GAAP; and
(3) access by the Commission to such books
and records and financial statements (or copies
thereof) in English as the Commission may request
and, in any event, GPU will provide the Commission
on request copies of such materials as are made
available to GPU and its subsidiaries. If and to
the extent that such entity's books, records or
financial statements are not maintained in accor-
dance with GAAP, GPU will, upon request of the
Commission, describe and quantify each material
variation therefrom as and to the extent required
by subparagraphs (a) (2) (iii) (A) and (a) (2)
(iii) (B) of Rule 53.
(iii) No more than 2% of GPU's domestic public
utility subsidiary employees will render any services,
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directly or indirectly, to EWGs and FUCOs in which GPU
directly or indirectly holds an interest.
(iv) None of the provisions of paragraph (b) of
Rule 53 render paragraph (a) of that Rule unavailable:
(A) Neither GPU nor any subsidiary of GPU is
the subject of any pending bankruptcy or similar
proceeding.
(B) GPU's average consolidated retained
earnings for the four most recent quarterly
periods (approximately $1.87 billion) represented
an increase of approximately $47 million (or
approximately 2.6%) in the average consolidated
retained earnings for the previous four quarterly
periods (approximately $1.82 billion).
(C) GPU did not incur operating losses from
direct or indirect investments in EWGs and FUCOs
in 1994 in excess of 5% of GPU's December 31, 1994
consolidated retained earnings.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees, commissions and expenses expected to be
incurred by GPU in connection with the proposed transactions will
be supplied by amendment.
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ITEM 3. APPLICABLE STATUTORY PROVISIONS.
GPU believes that Sections 6(a), 7 and 12 of the Act
and Rules 45 and 54 thereunder are applicable to GPU's guarantee
of Service Company's obligations under the New Loan Agreements.
ITEM 4. REGULATORY APPROVALS.
No state commission has jurisdiction with respect to any
aspect of the proposed transactions and, assuming your Commission
authorizes and approves all aspects of such transactions
(including the accounting therefor), no Federal commission other
than your Commission has jurisdiction with respect to any aspect
thereof.
ITEM 5. PROCEDURE.
It is requested that the Commission issue an order
authorizing the transactions proposed herein at the earliest
practicable date but in any event not later than March 31, 1996.
It is further requested that (i) there not be a recommended
decision by an Administrative Law Judge or other responsible
officer of the Commission, (ii) the Office of Public Utility
Regulation be permitted to assist in the preparation of the
Commission's decision, and (iii) there be no waiting period
between the issuance of the Commission's order and the date on
which it is to become effective.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
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(a) Exhibits:
A - None.
B-1 - Form of GPU Guarantee - to be filed
by amendment.
C - Not Applicable.
D - Not Applicable.
E - Not Applicable.
F-1 - Opinion of Berlack, Israels &
Liberman LLP -- to be filed by
amendment.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll -- to be filed by
amendment.
G - Financial Data Schedule -- to be
filed by amendment.
H - Proposed form of public notice.
(b) Financial Statements:
1-A - GPU (Corporate) Balance Sheets,
actual and pro forma, as at
December 31, 1995, Consolidated
Statements of Income and Retained
Earnings, actual and pro form, for
the twelve months ended December
31, 1995; pro forma journal entries
-- to be filed by amendment.
1-B - GPU and Subsidiary Companies
Consolidated Balance Sheets, actual
and pro forma, as at December 31,
1995, and Consolidated Statements
of Income and Retained Earnings,
actual and pro form, for the twelve
months ended December 31, 1995; pro
forma journal entries -- to be
filed by amendment.
2 - Reference is made to Financial
Statements in 1-A.
3 - Not Applicable.
4 - None, except as set forth in Notes
to the Financial Statements.
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ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
(a) The proceeds from the issuance and sale of the New
Notes will be used by Service Company to finance its business.
As such, the issuance of an order by your Commission with respect
thereto is not a major Federal action significantly affecting the
quality of the human environment.
(b) No Federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed
transactions which are the subject hereof.
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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.
GENERAL PUBLIC UTILITIES CORPORATION
By:________________________________
T.G. Howson, Vice President
and Treasurer
Date: February 7, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
H - Proposed form of public notice<PAGE>
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35-_______; 70-_______)
General Public Utilities Corporation
General Public Utilities Corporation ("GPU"), 100 Interpace
Parkway, Parsippany, New Jersey 07054, has filed a declaration
with this Commission pursuant to Sections 6(a), 7 and 12 of the
Public Utility Holding Company Act of 1935 ("Act") and Rules 45
and 54 thereunder.
By Order dated September 23, 1993 (HCAR No. 35-25898), the
Commission, among other things, authorized GPU Service
Corporation, a subsidiary service company ("Service Company"), to
enter into a Term Loan, Revolving Credit and Guaranty Agreement,
dated as of September 30, 1993 ("FUNB Loan Agreement"), with
First Union National Bank (successor in interest to First
Fidelity Bank, National Association, New Jersey) ("FUNB") and to
issue to FUNB its unsecured promissory notes maturing not later
than September 30, 1998, representing borrowings thereunder in
the amount of up to $16,500,000 (of which $11,500,000 constituted
a term loan and $5,000,000 a revolving credit facility which
facility has expired). The proceeds of the term loan borrowings
were used to refinance $11,500,000 of Service Company's then
outstanding indebtedness which Service Company had incurred to
finance the construction and equipping of its Parsippany, New
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Jersey headquarters office building. The revolving credit
borrowings were to be used for general corporate purposes
including capital expenditures. In its September 23, 1993 Order,
the Commission further authorized GPU to unconditionally
guarantee payment of principal of and interest on the notes and
Service Company's other obligations to FUNB under the FUNB Loan
Agreement.
By Order dated April 24, 1986 (HCAR No. 35-24069), the
Commission, among other things, authorized Service Company to
issue to Aetna Life Insurance Company ("Aetna") $32,000,000
aggregate principal amount of its secured notes ("Aetna Loan"),
maturing not later than December 31, 2001, secured by a first
lien and security interest in Service Company's Reading,
Pennsylvania office building. The proceeds of such borrowing
were used to repay then outstanding borrowings incurred to
finance the construction and equipping of the Reading office
building and for working capital purposes. The April 24, 1986
order also authorized GPU to guarantee Service Company's payment
of principal and interest on and performance of its other
obligations with respect to these secured notes.
At February 1, 1996, the principal amount of borrowings
outstanding under the FUNB Loan Agreement and Aetna Loan was
$11,500,000 and $19,200,000, respectively. The Aetna Loan bears
interest at a fixed rate of 10.87% per annum. Notes issued under
the FUNB Loan Agreement bear interest at fluctuating rates based
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upon (i) FUNB's base rate, or (ii) the London Interbank Offered
Rate plus 37.5 basis points and the applicable reserve.
Service Company has determined that market conditions are
sufficiently favorable to warrant a refinancing of the Aetna Loan
and, possibly, at the same time a refinancing of borrowings under
the FUNB Loan Agreement as well. Accordingly, Service Company
now intends, from time to time through February 1, 2006, to
borrow up to $40,000,000 from one or more commercial banks or
other institutions under one or more new term loan and/or
revolving credit facilities (each, a "New Loan Agreement")
entered into on or before February 1, 2006. Each New Loan
Agreement would provide for interest at negotiated market rates
but, in any case, not in excess of the greater of (i) 150 basis
points above the greater of (a) the lending bank's or other
recognized prime rate and (b) 50 basis points above the federal
funds rate, (ii) 200 basis points above the specified London
Interbank Offered Rate plus any applicable reserve requirement,
(iii) a negotiated fixed rate which, in any event, would not
exceed 300 basis points above the treasury bond rate with an
identical average life, or (iv) a rate equal to the average
domestic money bid rate for certificates of deposit of similar
maturities, plus up to 100 basis points and any applicable
reserve requirement; and would include other customary terms and
conditions. Loans under each New Loan Agreement would have a
maturity of up to 20 years and may be evidenced by promissory
notes. Proceeds of borrowings under the New Loan Agreement would
be used to repay outstanding borrowings under the Aetna Loan, and
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may be used to repay all or a portion of the outstanding
borrowings under the FUNB Loan Agreement. The balance would be
used for working capital and other corporate purposes.
In order to enable Service Company to borrow at more
favorable rates and other terms, GPU proposes, from time to time
through February 1, 2006, to enter into guaranty agreements in
favor of the banks or other institutional lenders under the New
Loan Agreements to unconditionally guaranty payment of principal,
interest and Service Company's other obligations under the New
Loan Agreements.
The declaration 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 _______________,
1996 to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the declarant 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 declaration, as amended or as
it may be further amended, may be granted.
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For the Commission by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
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