SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): November 25, 1998
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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1-6047 GPU, Inc. 13-5516989
(a Pennsylvania corporation)
300 Madison Avenue
Morristown, New Jersey 07962-1911
Telephone (973) 455-8200
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ITEM 5. OTHER EVENTS.
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On November 25, 1998, GPU announced that its Midlands Electricity plc
("Midlands") subsidiary had entered into an agreement to sell its domestic
electric supply business to National Power plc for a total purchase price of
approximately $300 million.
Midlands is a British regional electric company which distributes and
supplies electricity in England. In 1996, GPU and Energy Corp. jointly acquired
Midlands and each have a 50% ownership interest.
A copy of GPU's related news release is annexed as an exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibits
1. GPU News Release, dated November 25, 1998.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANTS HAVE DULY CAUSED THIS REPORT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU, INC.
By: /s/ T. G. Howson
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T. G. Howson, Vice President
and Treasurer
Date: December 7, 1998
EXHIBIT TO BE FILED BY EDGAR
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(c) 1. GPU News Release, dated November 25, 1998.
Exhibit (c) 1
GPU News Release
November 25, 1998
GPU, Inc. and Cinergy Corp. Sell UK Supply Business
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Retain Midlands Electricity Distribution Business
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MORRISTOWN, NJ -- November 25, 1998 -- GPU, Inc. officials announced GPU, Inc.
and Cinergy Corp. will sell the supply business of Midlands Electricity to
National Power plc. Midlands is a British regional electric company which
distributes and supplies electricity in England. GPU, Inc. and Cinergy Corp
jointly acquired Midlands in 1996 through Avon Energy Partners.
"This is an innovative deal that's good for all involved," said Fred Hafer,
chairman, president and chief executive officer of GPU, Inc. and currently
chairman of Avon Energy Partners and MEB. "National Power is purchasing a strong
supply business and we have an opportunity to concentrate on Midlands'
substantial and profitable distribution business."
National Power plc, one of the United Kingdom's primary power generation
companies, will acquire all the assets of Midlands' supply business and assume
its liabilities, including obligations under all Midlands' power purchase
agreements, for $300 million plus an adjustment for working capital at the
financial closing. National Power will acquire the business which purchases,
markets and supplies electricity to 2.2 million U.K. customers while Cinergy and
GPU will continue to own and operate Midlands' distribution lines and
substations.
"With this move, we're staying a step ahead of inevitable changes in the U.K.
electricity market," said James E. Rogers, president and chief executive officer
of Cinergy and vice chairman of Avon Energy Partners and MEB, in affirming the
company's commitment to developing Midlands' distribution operations.
The United Kingdom has been phasing in a competitive electric market and in
September began giving residential customers a choice of power suppliers.
Currently three primary generation companies, including National Power, sell
into a power pool from which regional electric companies purchase power for
their consumers. Midlands is one of the U.K.'s 12 regional electric companies
and is the first U.K. public electricity supplier to separate its distribution
and supply businesses in this way.
The companies hope to conclude the transaction, which is subject to approval by
Great Britain's Department of Trade and Industry and the Office of Electricity
Regulation, by the end of March 1999. Legislation permitting the separation of
distribution and supply licenses is expected to be passed at a later date. Until
<PAGE>
that occurs, Midlands will retain the distribution license but will appoint
National Power by contract to perform its supply obligations.
In the year ended March 1998, the supply business reported a profit before
interest and U.K. and U.S. income tax of approximately $31 million on revenues
of $1.9 billion. In the same period the distribution business recorded a profit
before interest and U.K. and U.S. income tax of approximately $236 million on
revenues of $570 million. About 1,300 supply business employees from Midlands
will be transferred to National Power. Midlands' 3,600 distribution, electrical
contracting, metering and energy management business employees are not affected.
GPU, Inc., headquartered in Morristown, NJ, is a registered utility holding
company. GPU's transmission and distribution subsidiaries--currently doing
business under the trade name GPU Energy--serve approximately two million
customers in a service area encompassing about half the land areas of New Jersey
and Pennsylvania. GPU's other subsidiaries include: GPU Generation, Inc., GPU
Advanced Resources, Inc.; GPU Nuclear, Inc.; GPU Service, Inc. and the GPU
International Group which owns, operates, develops, and invests in power
generation, transmission and distribution facilities globally.
Cinergy is the one of the United States' largest diversified energy companies
with revenues of $4 billion in 1997. The company was created in 1994 through the
combination of The Cincinnati Gas & Electric Co. and PSI Resources Inc. and was
the first merger of two low-cost utilities after the enactment of the Energy
Policy Act of 1992. Its operating companies serve 1.4 million electric customers
and 455,000 gas customers in Ohio, Indiana and Kentucky.
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Contact:
GPU
News Contact: Elaine Davis, 973/455-8418
Investor Contact: Joanne Barbieri 973/455-8720
or
FOR CINERGY
News Contact: Angeline Protogere, 317/838-1338
Steve Brash, 513/287-2226
Investor Contact: Felicia Ferguson 513-287-4348
