SEC File No. 70-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GPU INTERNATIONAL, INC. ("GPUI")
One Upper Pond Road
Parsippany, New Jersey 07054
(Name of company filing this statement and
address of principal executive offices)
GPU, INC. ("GPU")
(Name of top registered holding company parent of applicant)
M. A. Nalewako, Secretary W. S. Greengrove, Secretary
M. J. Connolly, Esq., Director GPU International, Inc.
of Legal Services One Upper Pond Road
GPU Service, Inc. Parsippany, New Jersey 07054
100 Interpace Parkway
Parsippany, New Jersey 07054
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
(Names and addresses of agents for service)<PAGE>
Item 1. Description of Proposed Transaction.
A. GPUI proposes, directly or through a direct or
indirect wholly owned subsidiary ("Subsidiary"), to enter into a
joint venture ("JV") with one or more unaffiliated entities for
the purposes of developing, manufacturing and marketing
stationary electrical power systems employing fuel cell
technology.
B. GPUI has been holding discussions with an entity
(the "JV Partner") which has been engaged for several years in
the business of developing and marketing fuel cell-based power
systems with a primary focus on certain limited applications.
The JV Partner and GPUI have now identified another market for
such systems, which has been defined to encompass stationary
systems, i.e., systems having a more or less fixed situs. This
market would encompass, among other things, so-called "remote" or
"distributed generation". It is expected that power systems of 1
kw or more would be encompassed within the business of the JV,
although smaller systems might also be encompassed if they are
otherwise consistent with the concept of "stationary" systems.
C. The JV Partner and GPUI are still discussing the
terms of the JV, which will take the form of a corporation,
partnership (general, limited or limited liability) or limited
liability company organized under the laws of a State of the
United States or other appropriate jurisdiction. At the outset,
the JV Partner is expected to own at least a majority interest in
the JV and GPUI (and other JV participants) will be accorded
certain minority shareholder protective rights, to be agreed
1<PAGE>
upon. The JV Partner will license the relevant technology to the
JV and provide technical and administrative support.
D. As part of the transaction, GPUI may also receive
warrants, options or other similar rights to make a direct
investment in the JV Partner, in such amount and on such terms as
may be agreed upon. GPUI may also be accorded an opportunity to
invest in other joint venture transactions undertaken by the JV
Partner.
E. GPUI therefore requests authority (1) to acquire
an interest in the stationary fuel cell-based power system
business as aforesaid and (2) to acquire the securities of a
Subsidiary and/or, directly or indirectly, the securities of the
JV. GPUI's aggregate direct or indirect investment in the JV
will not exceed $30 million.
F. The authorization requested herein with respect to
the acquisition of securities of a Subsidiary and/or the JV shall
expire upon the first to occur of (i) December 31, 2000 and
(ii) the adoption by the Commission of proposed Rule 58 (HCAR No.
35-26313, June 20, 1995) or such other rule, regulation or order
as shall exempt the transactions as herein proposed from Section
9(a) of the Act.
G. Authorization is also sought for GPUI to provide
services or sell goods to the JV at market prices1 or at cost, as
may be agreed upon from time to time by GPUI and the JV.
_________________________
1 GPUI previously received authorization to provide services
or sell goods at market prices, but only to certain associated
project entities. See HCAR No. 26307 (June 14, 1995). Market
pricing as requested herein would be consistent with such prior
authorization and with the principles underlying Rule 90(d) under
the Act.
2<PAGE>
H. It is submitted that all of the criteria of Rules
53 and 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, 1995 and Quarterly Reports on Form
10-Q for the quarters ended March 31, 1996 and June 30, 1996, as
filed under the Securities Exchange Act of 1934, was
approximately $2 billion. As of June 30, 1996, GPU had invested,
or committed to invest, directly or indirectly, an aggregate of
approximately $242 million in exempt wholesale generators
("EWGs") and $673 million in foreign utility companies ("FUCOs"),
representing approximately 44% of such consolidated retained
earnings, which is below the 50% ("safe harbor") limitation of
Rule 53. GPU's aggregate investment in EWGs and FUCOs will not
at any time exceed the "safe harbor" limitation imposed by Rule
53 without prior Commission authorization.
(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:
(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 GAAP; and
3<PAGE>
(3) GPU directly or through its
subsidiaries 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
subsidiaries undertakes to provide the Commission access to such
books and records and financial statements, or copies thereof in
English, as the Commission may request.
(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, 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
4<PAGE>
maintained in accordance 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, directly
or indirectly, to any EWG or FUCO in which GPU directly or
indirectly holds an interest.
(iv) Copies of this Application are being provided
to the New Jersey Board of Public Utilities and the Pennsylvania
Public Utility Commission, the only federal, state or local
regulatory agencies having jurisdiction over the retail rates of
GPU's electric utility subsidiaries.2 In addition, GPU will
submit to each such commission copies of any Rule 24 certificates
required hereunder, as well as a copy of Item 9 of GPU's Form U5S
and Exhibits H and I thereof (commencing with the Form U5S to be
filed for the calendar year in which the authorization herein
requested is granted).
(v) None of the provisions of paragraph (b) of
Rule 53 render paragraph (a) of that Rule unavailable for the
proposed transactions.
_________________________
2 Pennsylvania Electric Company ("Penelec") is also subject to
retail rate regulation by the New York Public Service Commission
with respect to its retail service to approximately 11,300
customers in Waverly, New York, served by Waverly Electric Power
& Light Company, a Penelec subsidiary. Waverly Electric's
revenues are immaterial, accounting for less than 1% of Penelec's
total operating revenues.
5<PAGE>
(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 $2 billion) represented an increase of
approximately $63 million (or approximately 3%) in the average
consolidated retained earnings for the previous four quarterly
periods (approximately $1.99 billion).
(C) GPU did not incur operating losses from
direct or indirect investments in EWGs and FUCOs in 1995 in
excess of 5% of GPU's consolidated retained earnings.
(vi) In accordance with Rule 54, the requirements
of Rule 53(a), (b) and (c) are fulfilled.
Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions and expenses to be
incurred in connection herewith will be filed by amendment.
Item 3. Applicable Statutory Provisions.
Sections 9(a), 10, 12 and 13(b) of the Act and Rules 90
and 91 thereunder are applicable to the transactions proposed
herein.
It is requested that GPUI be authorized to report,
annually in an Exhibit to its Annual Report on Form U-13-60,
information as to each investment made by GPUI in a Subsidiary or
the JV during the previous year and the number of GPUI employees
providing services or selling goods to the JV on a regular basis
during the previous year. The foregoing shall be in lieu of any
certificates of completion or partial completion otherwise
required by Rule 24 under the Act. To the extent such
6<PAGE>
certificates contain confidential or proprietary business or
commercial information, confidential treatment under Rule 104 may
be sought.
Item 4. Regulatory Approval.
No state or Federal commission (other than your
Commission) has jurisdiction with respect to the subject
transactions.
Item 5. Procedure.
It is requested that the Commission issue an order with
respect to the transactions proposed herein at the earliest
practicable date but, in any event, not later than October 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.
(a) Exhibits:
A Not applicable.
B Not applicable.
C Not applicable.
D Not applicable.
E Not applicable.
F Opinion of Berlack, Israels & Liberman
LLP -- to be filed by amendment.
G Proposed form of public notice.
7<PAGE>
(b) Financial Statements:
1 None.
Note: GPU Corporate and consolidated actual
and pro forma financial statements are
omitted since they are not deemed to be
material or relevant or necessary for a
proper disposition of the proposed
transactions.
2 None.
3 None.
4 None.
Item 7. Information as to Environmental Effects.
The proposed transactions are for the purpose of
carrying out GPUI's business activities. Consequently, the
issuance of an order by your Commission with respect to the
subject transactions is not a 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 subject
transactions. Reference is made to Item 4 hereof regarding
regulatory approvals with respect to the proposed transactions.
8<PAGE>
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.
GPU INTERNATIONAL, INC.
By:
B. L. Levy, President
Date: September 11, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
(a) Exhibits:
G Proposed form of public notice.<PAGE>
EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70- )
GPU INTERNATIONAL, INC.
GPU INTERNATIONAL, INC. ("GPUI"), One Upper Pond Road,
Parsippany, New Jersey 07054, a Delaware corporation and a
subsidiary of GPU, Inc., a registered holding company, has filed
an Application pursuant to Sections 9(a), 10, 12 and 13(b) of the
Public Utility Holding Company Act of 1935 (the "Act") and Rules
90 and 91 thereunder.
GPUI proposes, directly or through a direct or indirect
wholly owned subsidiary ("Subsidiary"), to enter into a joint
venture ("JV") with one or more unaffiliated entities for the
purposes of developing, manufacturing and marketing stationary
electrical power systems employing fuel cell technology.
GPUI has been holding discussions with an entity (the
"JV Partner") which has been engaged for several years in the
business of developing and marketing fuel cell-based power
systems with a primary focus on certain limited applications.
The JV Partner and GPUI have now identified another market for
such systems, which has been defined to encompass stationary
systems, i.e., systems having a more or less fixed situs. This
market would encompass, among other things, so-called "remote" or
"distributed generation". It is expected that power systems of 1
kw or more would be encompassed within the business of the JV,
although smaller systems might also be encompassed if they are
otherwise consistent with the concept of "stationary" systems.<PAGE>
The JV Partner and GPUI are still discussing the terms
of the JV, which will take the form of a corporation, partnership
(general, limited or limited liability) or limited liability
company organized under the laws of a State of the United States
or other appropriate jurisdiction. At the outset, the JV Partner
is expected to own at least a majority interest in the JV and
GPUI (and other JV participants) will be accorded certain
minority shareholder protective rights, to be agreed upon. The
JV Partner will license the relevant technology to the JV and
provide technical and administrative support.
As part of the transaction, GPUI may also receive
warrants, options or other similar rights to make a direct
investment in the JV Partner, in such amount and on such terms as
may be agreed upon. GPUI may also be accorded an opportunity to
invest in other joint venture transactions undertaken by the JV
Partner.
GPUI therefore requests authority (1) to acquire an
interest in the stationary fuel cell-based power system business
as aforesaid and (2) to acquire the securities of a Subsidiary
and/or, directly or indirectly, the securities of the JV. GPUI's
aggregate direct or indirect investment in the JV will not exceed
$30 million.
The authorization requested herein with respect to the
acquisition of securities of a Subsidiary and/or the JV shall
expire upon the first to occur of (i) December 31, 2000 and
(ii) the adoption by the Commission of proposed Rule 58 (HCAR No.
35-26313, June 20, 1995) or such other rule, regulation or order
2<PAGE>
as shall exempt the transactions as herein proposed from Section
9(a) of the Act.
Authorization is also sought for GPUI to provide
services or sell goods to the JV at market prices or at cost, as
may be agreed upon from time to time by GPUI and the JV.
It is represented that all of the criteria of Rules 53
and 54 under the Act with respect to the proposed transactions
are satisfied.
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
_________, 1996 to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the
applicants at the addresses specified above. Proof of service
(by affidavit or, in 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.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz
Secretary
3<PAGE>
