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): October 15, 1997
GPU, Inc.
(Exact name of registrant as specified in charter)
Pennsylvania 1-6047 13-5516589
(State or other Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
100 Interpace Parkway, Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 263-6500
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ITEM 5. OTHER EVENTS.
As previously announced, on October 12, 1997 the State of
Victoria, Australia named GPU as the winning bidder for the
assets of PowerNet Victoria, the State's electric transmission
company. GPU has agreed to pay the State a total purchase price
of US$1.88 billion. Financial closing is expected to take place
on or about November 6, 1997.
GPU will finance the acquisition of PowerNet through a
combination of non-recourse debt financing in the amount of
approximately US$1.380 billion, which is being underwritten by an
Australian banking syndicate led by the Chase Manhattan Bank
Australia, Dresdner Bank Australia and JP Morgan Australia, and
equity financing in the amount of US$450 million provided by a
Chase Manhattan Bank loan facility. GPU will initially guaranty
$50 million, of borrowings under the Chase facility and when
authorized by the Securities and Exchange Commission, the entire
amount of the outstanding borrowings. GPU will also make a US$50
million equity contribution at the closing.
GPU presently owns a 50% interest in Solaris Power, a
distribution company serving customers in and around Melbourne,
Australia, which GPU acquired in 1995 in partnership with the
Australian Gas Light Company. Under the Victorian Government's
cross-ownership restrictions, GPU will be required to reduce its
ownership interest in Solaris Power to not more than 20% within
six months. GPU will use the net proceeds from this sale to
repay the Solaris' acquisition debt (currently about US$57
million) and the balance to repay a portion of the PowerNet
equity financing.
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In connection with the PowerNet transaction, GPU
announced that it plans to sell up to 7 million shares of
additional common stock in early 1998. GPU would use the net
proceeds from such sale to repay debt associated with the
PowerNet acquisition and its 1996 acquisition of a 50% interest
in Midlands Electricity.
Finally, GPU announced that it intends to proceed with a
sale of its fossil fuel and hydroelectric generating facilities.
These plants, operated by GPU Generation, total about 5,300
megawatts of capacity and have a book value of approximately $1.1
billion. As previously reported, GPU has entered into a
confidentiality agreement with a potential purchaser of the
Oyster Creek and Three Mile Island Unit No. 1 nuclear generating
stations.
A copy of GPU's related news release is annexed as an
exhibit.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits.
1. GPU News Release, dated October 12, 1997.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE
ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED.
GPU, INC.
By:______________________________
T.G. Howson, Vice President
and Treasurer
Date: October 15, 1997
<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits.
1. GPU News Release, dated October 12, 1997.
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NEWS RELEASE
Date: October 12, 1997
Further Info.: Gary D. Plummer 610-921-6636/Pager 888-510-7067
Ray E. Dotter 610-921-6814/Pager 717-237-8313
For Release: Immediate
Release No.: 83-97
GPU ANNOUNCES ACQUISITION OF AUSTRALIAN COMPANY, PLANNED SALE OF
GENERATION ASSETS
PARSIPPANY, NJ, Oct. 12 GPU, Inc., announced today that
the Australian State of Victoria has named it the winning bidder
for PowerNet, the state's electrical transmission company. The
purchase price is $1.88 billion US.
GPU, continuing its focus on its core delivery business,
separately announced that it intends to begin a process that
would lead to the sale of up to all of its non-nuclear generation
assets through an auction.
Referring to the Australian purchase, Fred D. Hafer, GPU
chairman, president and CEO, said, "The PowerNet acquisition
further implements our strategy of expanding our ongoing efforts
to grow our core infrastructure business in new markets. The
purchase also better positions GPU to participate further in the
Australian market."
GPU Electric, which is part of the GPU International Group,
will acquire PowerNet's assets early in November. GPU Electric is
the GPU subsidiary that owns 50 percent of Solaris Power in
Australia and 50 percent of Midlands Electricity in the United
Kingdom.
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J. P. Morgan is the financial adviser to GPU. Debt financing
for the acquisition has been arranged through a banking syndicate
led by Chase, Dresdner and J.P. Morgan banks. At closing, equity
funding will be provided through a cash contribution from GPU and
a non-recourse equity loan underwritten by Chase Manhattan Bank.
Because of Victoria's cross-ownership restrictions, GPU
plans to seek to dispose of its 50 percent ownership of Solaris
Power.
PowerNet transmits electricity throughout Victoria and is
interconnected with the neighboring states of New South Wales and
South Australia. It had 1996 revenues of about $215 million.
"We expect the PowerNet acquisition to be accretive to GPU s
earnings in 1998," Hafer said.
GPU also announced today its intention to proceed with the
sale of approximately seven million shares of common stock in
early 1998 with Goldman, Sachs & Co. as lead underwriter. The
sale proceeds will be used to pay down acquisition debt
associated with the Midlands and PowerNet acquisitions.
With reference to the planned generation sale, Hafer said
GPU had been exploring the option of selling the generation
assets owned by its three utility subsidiaries, who do business
as GPU Energy.
"This approach reflects our belief that we must concentrate
on our core business of delivering electricity to customers,
rather than using our resources to expand our generation
capability enough to be a successful competitor in the merchant
generation business," Hafer said.
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GPU's fossil and hydro generating facilities, which are
operated by GPU Generation, total about 5,300 megawatts (MW) and
have a book value of about $1.1 billion.
"We believe the generation assets will be able to grow in
the hands of a firm which intends to pursue the generation
segment of the business in our restructured industry," he said.
GPU anticipates that the existing GPU Generation employees
would largely be assumed by the new owner or owners of the
plants, but recognizes that the final determination will depend
on the business needs of the successful buyer.
The process for the sale of non-nuclear generation assets is
expected to take about a year to complete and is subject to
approvals by several state and federal regulatory agencies. GPU
Energy s restructuring filings in Pennsylvania and New Jersey
will have to be amended to reflect this decision. GPU has
retained Goldman, Sachs as its adviser on the asset sale.
Decisions on the future of GPU's nuclear facilities will be
independent of the sale of the fossil and hydro generation, Hafer
said.
GPU previously announced that its Oyster Creek Nuclear
Generating Station was a candidate for sale, early retirement or
continued operation and that the Three Mile Island Unit 1 nuclear
plant was a candidate for sale or continued operation. GPU
recently confirmed the fact that a confidentiality agreement has
been executed with a potential purchaser.
One of the nation's largest electric utility systems, GPU
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reported net income of $298 million on operating revenues of
$3.92 billion in 1996.
GPU's three operating utility subsidiaries, Jersey Central
Power & Light, Metropolitan Edison and Pennsylvania Electric,
doing business as GPU Energy, serve nearly two million customers
in Pennsylvania and New Jersey.
The GPU International Group has ownership interests in
electricity distribution and supply businesses in England and
Australia serving about 2.4 million customers; 9 operating
cogeneration plants in North America, totaling 877 MW (of which
GPUI's equity interest is 304 MW); and 12 operating generating
facilities located abroad, totaling 3,750 MW (of which GPUI's
equity interest is 2,270 MW).
GPU Generation, Inc., and GPU Nuclear, Inc., operate and
maintain the GPU companies' non-nuclear and nuclear generation
facilities, respectively. Corporate functions are performed by
GPU Service, Inc.
Mr. Hafer and other GPU officers will be available at 1 p.m.
EDT Monday for a conference call for the media. The toll-free
number for US media to dial is 1-888-558-0548. Media outside the
US should call 201-986-0914.
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