Exhibit I
SECURITIES AND EXCHANGE COMMISSION
(RELEASE NO. 35- ----------); 70-
GPU, Inc., 300 Madison Avenue, Morristown, New Jersey 07960, a registered
holding company, has filed with the Commission an Declaration 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 April 14, 2000 (HCAR No. 27165), the Commission authorized
GPU to acquire for cash all of the issued and outstanding common shares of MYR.
On April 26, 2000, MYR was merged with and into GPU Acquisition Corp., a
wholly-owned subsidiary of GPU, and became a wholly-owned subsidiary of GPU.
MYR's principal business involves the providing of utility transmission and
distribution, infrastructure and related commercial and industrial electrical
contracting services to utility, industrial, mining, institutional and
governmental entities on a nationwide basis.
At the time of the acquisition, MYR was party to a Credit Agreement, dated
September 21, 1999 ("Old Credit Agreement"), with Harris Trust and Savings Bank
("Harris Bank") and Comerica Bank providing for revolving credit borrowings by
MYR of up to $30 million outstanding at any one time, of which up to $10 million
could be in the form of letter of credit (L/C) obligations. Effective with GPU's
acquisition of MYR, the Old Credit Agreement was amended to, among other things,
reduce the aggregate amount of available credit thereunder to $20 million to
reflect Comerica's withdrawal as a lender under the facility. As a temporary
measure, pursuant to the Rule 45(a)(4) under the Act, GPU made open account
advances in the amount of $17.3 million, without interest, to MYR to provide it
with working capital. At September 30, 2000, $13,333,337.00 of borrowings were
outstanding under the Old Credit Agreement.
On November 28, 2000, MYR entered into a new Credit Agreement, dated
November 28, 2000 ("New Credit Agreement"), with Bank One, NA as administrative
agent and as the initial lender. The New Credit Agreement permits borrowings by
MYR from time to time in an aggregate amount not to exceed $50 million
outstanding at any one time. Bank One may assign a portion of its rights and
obligations to new lenders which will become parties to the New Credit
Agreement. As described below, GPU is proposing to guarantee MYR's obligations
under the New Credit Agreement.
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Loans made under the New Credit Agreement ("Loans"), at MYR's election,
bear interest at either (i) the Eurodollar Rate, (ii) the Floating Rate or (iii)
a Fixed Rate.
The Eurodollar Rate for an interest period is the sum of a specified
British Bankers' Association Interest Settlement Rate for U.S. dollar deposits
(as adjusted for any applicable reserve requirements) and the Applicable Margin.
The Applicable Margin ranges from 50 to 200 basis points, depending upon the
credit rating of GPU's senior unsecured debt, plus, after the Non Guaranty Date,
10 basis points. The Non Guaranty Date is April 1, 2001 except that, if GPU
delivers the GPU Guaranty described below before April 1, 2001, the Non Guaranty
Date will not occur.
The Floating Rate for each day is equal to (i) Alternate Base Rate, minus
(ii) 200 basis points, plus (iii) after the Non Guaranty Date, 10 basis points.
Alternate Base Rate for any day is the higher of (i) Bank One's prime rate and
(ii) the Federal Funds effective rate plus 50 basis points.
The Fixed Rate is a fixed rate for an interest period of up to 30 days
determined by mutual agreement of MYR and the lender under the New Credit
Agreement at such time as there is only one lender under the New Credit
Agreement.
MYR may borrow and repay Loans under the New Credit Agreement through
November 1, 2003. All Loans are payable on November 1, 2003.
Borrowing of the Loans is subject to certain conditions, and the Loans
will be subject to acceleration under certain circumstances, which conditions
and circumstances are customary for agreements similar to the New Credit
Agreement. The Loans are prepayable from time to time as provided in the New
Credit Agreement.
MYR paid Bank One a one time commitment fee at the initial closing of
$25,000. MYR will pay the lenders a facility fee on the unused commitment which
ranges from 10 basis points to 40 basis points, depending upon the credit rating
of GPU's senior unsecured debt, plus, after the Non Guaranty Date, 2.5 basis
points.
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The New Credit Agreement includes a letter of credit ("L/C") facility.
Pursuant to this facility, MYR is able to request lenders which are parties to
the New Credit Agreement to issue an L/C, in a maximum aggregate face amount for
all L/Cs outstanding of up to $10 million. The aggregate amount that MYR may
borrow under the New Credit Agreement is reduced by the face amount of all
outstanding L/Cs. Drawings on an L/C would bear interest at the Floating Rate if
such amounts are repaid by MYR on the same day the drawing is made on the L/C
and, if repaid thereafter, the Floating Rate plus 200 basis points. If MYR
elects not to immediately reimburse the issuing bank and the conditions for a
borrowing under the New Credit Agreement are satisfied, a Loan could be made to
satisfy the reimbursement obligation. MYR would pay a letter of credit fee equal
to the Applicable Margin for Eurodollar Loans on the undrawn stated amount of
outstanding L/Cs.
As described above, the New Credit Agreement provides that if GPU does not
enter into a guaranty of MYR's obligations under the New Credit Agreement (the
"GPU Guaranty") by April 1, 2001, the interest rate on Loans and fees payable
would increase. Accordingly, GPU now proposes to enter into the GPU Guaranty.
Under the GPU Guaranty, GPU would unconditionally and irrevocably guarantee the
punctual payment when due of all obligations of MYR under the New Credit
Agreement.
MYR will use the proceeds of the Loans to refinance borrowings under the
Old Credit Agreement, repay outstanding open account advances made by GPU, for
working capital, acquisition financing and other general corporate purposes. MYR
has used the proceeds of initial Loans to repay approximately $18 million of
outstanding borrowings under the Old Credit Agreement and to repay outstanding
open account advances of GPU in the aggregate amount of $15 million. There
remains outstanding $2.3 million of open account advances. (MYR would seek
separate Commission authorization for any proposed acquisition if and to the
extent required by the Act and the Commission's regulations thereunder.)
It is requested that the filing of Certificates Pursuant to Rule 24 under
the Act required to be filed hereunder be filed quarterly within ten days of the
end of each calendar quarter beginning with the quarter in which the
authorization herein requested is granted. Such certificates will include the
principal amount of indebtedness and face amount of L/Cs that MYR has
outstanding under the New Loan Agreement.
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The Declaration, as amended, is 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
----------------, 2001 to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the applicant at the address
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, may be granted.
