UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) July 27, 1998
CILCORP Inc.
(Exact name of registrant as specified in its charter)
Illinois 1-8946 37-1169387
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Hamilton Blvd., Suite 300, Peoria, Illinois 61602
(Address of principal executive offices)
Registrant's telephone number, including area code (309) 675-8810
Item 5. Other Events
Sale of Stock of QST Communications Inc.
Attached is a copy of a press release issued by CILCORP Inc. on
July 27, 1998, regarding the sale of the common stock of QST
Communications Inc. to McLeodUSA Telecommunications Services,
Inc.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CILCORP Inc.
(Registrant)
Date July 27, 1998 R. O. Viets
R. O. Viets
President and Chief Executive Officer
Date July 27, 1998 T. D. Hutchinson
T. D. Hutchinson
Controller
CILCORP Inc. Announces Sale of Telecommunications Subsidiary
For Immediate Release
PEORIA, IL. July 27, 1998 CILCORP Inc. (NYSE & CHX: CER)
today announced it has reached a definitive agreement to sell the
common stock of its fiber optic-based telecommunications
subsidiary, QST Communications Inc., to McLeodUSA
Telecommunications Services, Inc., a wholly-owned subsidiary of
McLeodUSA Incorporated (NASDAQ/NMS: MCLD) for $20 million in cash
and stock options valued at $5.5 million.
Upon closing of the transaction, which is subject to
approval of a Hart-Scott-Rodino filing, CILCORP Inc. expects to
recognize a third-quarter 1998 after-tax gain of approximately $7.8
million, or $.57 per share, depending on QST Communications' book
value at the end of July.
The stock options allow QST Enterprises Inc., a subsidiary
of CILCORP Inc. and parent company of QST Communications Inc., to
purchase Class A common shares of McLeodUSA Incorporated at a
predetermined price over a four-year vesting period. The options
have a ten-year life. In addition, a put feature gives QST
Enterprises, once vested, the right to take a set amount of cash
per share in lieu of stock from McLeodUSA. The put feature of
the transaction expires after five years.
QST Communications Inc., which began operations in 1996,
provides high bandwidth fiber optic-based communications over a
112-mile SONET network in the Peoria area. A 65-mile extension of
that network connecting Peoria with Springfield, Illinois, is
expected to be operational next month.
CILCORP Inc., headquartered in Peoria, is a holding company
for gas and electric energy service companies.
FOR ADDITIONAL INFORMATION, CONTACT;
Gary A. Ebeling
Director-Investor Relations
(309) 675-8810
