File No. 70-7201
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM U-1
POST-EFFECTIVE AMENDMENT NO. 14
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
________________________________________
Names of Companies filing this statement and addresses of principal
executive offices:
Leidy Hub, Inc.
10 Lafayette Square
Buffalo, New York 14203
(formerly Enerop Corporation)
Name of Top Registered Holding Company
NATIONAL FUEL GAS COMPANY
Names and Addresses of Agents for Service:
G. T. Wehrlin, Secretary D. F. Smith
Leidy Hub, Inc. 10 Lafayette Square
10 Lafayette Square Buffalo, New York 14203
Buffalo, New York 14203
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
Kyle G. Storie
10 Lafayette Square
Buffalo, New York 14203
Item 1. Description of Proposed Transaction.
Effective December 29, 1993, Enerop Corporation, a New
York business corporation, changed its name to Leidy Hub, Inc.
("Leidy"). Leidy is a wholly-owned subsidiary of National Fuel Gas
Company ("National"). National is a public utility holding company
registered under the Public Utility Holding Company Act of 1935, as
amended ("Act"). Neither National, nor any of the subsidiaries of
National other than Leidy, join in this Post-Effective Amendment to
the Application Declaration on file in this proceeding.
A. History of this file to date.
Metscan, Inc. ("Metscan") is a New York corporation with
its principal place of business located at 1450 Rochester Street,
Lima, New York, 14485. Metscan developed a low cost and efficient
electronic automatic meter reading device ("AMD"), that provides an
economical and efficient method of reading residential natural gas
utility meters. The AMD is a microprocessor which is affixed to a
gas meter and which accumulates and stores information regarding
natural gas usage by a customer and transmits it by telephone line to
a computer. This information is then available for billing purposes.
The Metscan system, i.e., the attachment of the AMD to a gas meter,
and its connection by telephone line to a computer (i) improves meter
reading efficiency, as accurate readings can be received
electronically, (ii) enhances meter security and theft detection,
because actual consumption data is phoned in monthly (or possibly
daily) and the AMD has a tamper alarm, and (iii) enhances consumption
monitoring by the ability to provide daily consumption data.
National Fuel Gas Distribution Corporation
("Distribution"), National's public utility subsidiary and an
affiliate of Leidy, worked with Metscan in conducting a small
field-test of the Metscan system in the fall of 1985. Both
Distribution and Metscan were satisfied with the results. Therefore,
National requested, and on May 1, 1986 received, an order in this
file (HCAR. No. 35-24081) authorizing it to lend Metscan the sum of
$200,000 in exchange for a promissory note. Pursuant to this Order,
National was authorized to convert this note to 80,000 shares of
Class C Preferred Stock of Metscan at $2.50 per share.
In 1987, Distribution installed more than 1,600 Metscan
AMDs in its service territory in Erie, Pennsylvania and Buffalo, New
York, as part of an expanded test program. This program confirmed
the reliability and accuracy of the Metscan AMDs and their potential
to provide accuracy and save money for Distribution.
On March 18, 1988, National and Leidy received an order in
this file (HCAR. No. 35-24604), which (i) authorized National to make
a $442,500 contribution to the capital of Leidy, and to assign to
Leidy its $200,000 investment in Metscan and the accompanying option
to purchase Metscan stock, and (ii) authorized Leidy to contribute
$442,500 to Metscan Technology Partners (the "Partnership") in return
for a 9.96% interest in the Partnership. The $442,500 contribution
to Leidy's capital investment occurred on March 25, 1988. On
February 1, 1989, National assigned to Leidy its $200,000 investment
in Metscan and the accompanying option to purchase Metscan stock.
Pursuant to a third order in this file, issued on April
27, 1989 (HCAR. No. 35-24874), the SEC authorized the conversion of
Leidy's aggregate $642,500 investment in Metscan and the Partnership
to 257,000 shares of common stock of a new corporate entity to be
formed by the "rollup" of Metscan and the Partnership. The rollup
occurred on May 17, 1989. The entity formed by the rollup was
designated Metscan Acquisition Corp. ("MAC"). On July 10, 1989, MAC
changed its name to Metscan, Inc. ("Metscan"). As part of this
rollup, all preexisting Metscan or Partnership notes, all preexisting
Metscan preferred stock, all preexisting options, and all preexisting
Partnership interests, which were either convertible into common
stock of Metscan, or exercisable for common stock of Metscan, were so
converted or exercised, or were modified to be exercisable into
common stock of MAC and then exercised. Also, all Metscan shares
were exchanged for an equal number of shares of common stock of MAC.
(All MAC shares are now Metscan shares by virtue of the
aforementioned name change.)
Thus, as a result of all of the aforementioned actions,
Leidy owned 257,000 shares of Metscan common stock, at a cost of
$642,500, in mid-1989.
Leidy in 1990 requested, and obtained, a fourth order in
this file, which was issued on September 7, 1990 (HCAR. No.
35-25143). This order permitted Leidy to acquire 143,000 additional
shares of Metscan common stock for $357,500 ($2.50 per share), and
39,500 shares of Metscan Series A preferred stock, $4 par value for
$158,000 ($4 per share). Those shares were acquired on September 26,
1990.
Leidy received a fifth order in regard to this file on
July 21, 1991 (HCAR. No. 35-25346). This order authorized Leidy to
purchase 17,000 additional shares of Metscan Series A preferred stock
for $68,000. Leidy's total investment in Metscan to date is
$1,226,000.
B. The proposed transaction.
On September 15, 1993, Leidy (then Enerop) entered into
the Class B Convertible Preferred Stock Purchase Agreement attached
as Exhibit B-14 (the "Purchase Agreement") whereby, subject to
approval of the Commission as sought in this Amendment, Leidy will
purchase 29,167 out of 2,736,667 shares of newly issued Metscan, Inc.
Class B Convertible Preferred Stock, $.01 par value ("Class B
Preferred"). The several purchasers listed in Schedule I of the
Purchase Agreement (the "Other Purchasers") also bought Class B
Preferred in the amounts indicated on Schedule I. The purchase price
for the Class B Preferred is $1.20 per share. The entire capital
investment of all purchasers is $3,284,000.00 of which Leidy would be
investing $35,000.00. This $35,000.00 is being held in escrow
pending approval of this Amendment (See Exhibit B-19).
Upon consummation of the proposed acquisition, Leidy will
own 7.31% of Metscan's Common Stock, 9.83% of the Series A Preferred
Stock and 1.07% of the Series B Preferred Stock, or about 5.52% of
the actual and potential equity investment in Metscan. (See "Exhibit
B-15"). Additionally, as set forth in the Restated Certificate of
Incorporation of Metscan, Inc. ("Exhibit A-3") the Series B Preferred
Shareholders will have certain preferential rights regarding
(i) election of Board members, (ii) payment of dividends, and
(iii) liquidation rights as well as other protective provisions.
This will effectively reduce Leidy's control over Metscan because
Leidy has such a small percentage of the Series B Prefered vis-a-vis
the Other Purchasers. The capital infusion by the Other Purchasers
and Leidy will, however, allow Metscan to continue to operate and
further develop its products, thus enhancing the possibility of Leidy
receiving a return on its total investment.
Metscan will use the $35,000.00 investment for working
capital and/or to fund ongoing product development efforts.
Metscan has operated, and will continue to operate, as a
business, and will in this connection, among other things, conduct
manufacturing, sales and related activities essential to the
commercial success of its automatic meter reading system, either
directly or through agents under its control. Leidy has not
undertaken, and will not undertake, Metscan's business activities.
Ongoing business dealings between Leidy and Metscan have been and are
expected to continue to be conducted in the ordinary course of
business.
Leidy will not, directly or indirectly, lend or in any
manner extend credit to, nor indemnify, nor make any donation or
capital contribution to, Metscan, without prior Commission approval.
Leidy will divest itself of all interest in Metscan ten
years from the date of its purchase of the Series B Preferred Stock.
Item 2. Fees Commissions and Expenses
None.
Item 3. Applicable Statutory Provisions.
Sections 9(a) and 10 of the Act and Rules 23 and 24 are
considered to be applicable to the proposed transaction.
Applicable Statutory
Provision Transaction.
Sections 9(a) and 10, Acquisition by Leidy of 29,167
Rules 23 and 24. shares of Metscan Series B
Preferred Stock.
It is believed that the proposed acquisition is in the
interests of investors, consumers and the public, and will not unduly
complicate the capital structure of Leidy.
To the extent that the proposed transaction is considered
by the Commission to require authorization, approval or exemption
under any section of the Act or provision of the Rules or Regulations
other than those specifically set forth herein, request for such
authorization, approval or exemption is hereby made.
Item 4. Regulatory Approval.
No consent or approval of any state commission or any
federal commission (other than the Securities and Exchange
Commission) is required with respect to the transaction proposed
herein.
Item 5. Procedures.
The Commission is requested to issue a supplemental order
pursuant to the provisions of Rule 23 permitting this Post-Effective
Amendment to become effective on or before March 31, 1994. If a
hearing is ordered, Applicant waives a recommended decision by a
hearing officer or other responsible officer of the Commission.
Applicant consents that the Office of Public Utility Regulation may
assist in the preparation of the commission's decision and/or order
and requests that the Commission's order become effective upon
issuance.
Item 6. Exhibits and Financial Statements.
B-21 Metscan, Inc. Shares Issued and Outstanding
as of December 31, 1993
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused this
Post-Effective Amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
Dated: April 8, 1994 LEIDY HUB, INC.
By: /s/G. T. Wehrlin
G. T. Wehrlin, Secretary
<TABLE>
<CAPTION>
EXHIBIT B-21
METSCAN, INC.
SHARES ISSUED AND OUTSTANDING
AS OF DECEMBER 31, 1993
Prefer-
red A % of Preferred % of
Common # % of # of Prefer- B # of Prefer- % of
of Shares Common Shares red A Shares red B Total Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CU Gas 1,000,000 18.29% 254,500 44.30% 83,333 3.08% 1,337,833 15.29%
Enerop Corporation 400,000 7.31% 56,500 9.83% 0* 0.00%* 456,500* 5.22%*
Equitable Resources
Energy Company 2,750,000 50.29% 254,500 44.30% 408,333 15.08% 3,412,833 39.00%
Newport America
Corporation 240,000 4.39% 9,000 1.57% 0 0.00% 249,000 2.85%
Wilmington
Securities, Inc. 616,913 11.28% 0 0.00% 37,500 1.39% 654,413 7.48%
Management 461,833 8.44% 0 0.00% 0 0.00% 461,833 5.28%
Enertek Partners, L.P. 0 0.00% 0 0.00% 625,000 23.08% 625,000 7.14%
New York Business
Venture Partnership 0 0.00% 0 0.00% 1,250,000 46.17% 1,250,000 14.28%
Jess L. Belser 0 0.00% 0 0.00% 125,000 4.62% 125,000 1.43%
Scott T. Jones 0 0.00% 0 0.00% 133,333 4.92% 133,333 1.52%
Peter A. Fried 0 0.00% 0 0.00% 20,000 0.74% 20,000 0.23%
James J. O'Neill 0 0.00% 0 0.00% 16,667 0.62% 16,667 0.19%
Sherri Croasdale 0 0.00% 0 0.00% 8,333 0.31% 8,333 0.10%
_________ _______ _______ _______ _________ _______ _________ _______
Total 5,468,746 100.00% 574,500 100.00% 2,707,500* 100.00% 8,750,746* 100.00%
</TABLE>
*Does not include 29,167 to be purchased by Leidy, whereupon Leidy will own
1.07% of the Series B Preferred (29,167/2,736,667) and 5.52% of all
outstanding shares of Metscan. (485,667/8,799,913)
