Amendment No. 1
to
SEC File No. 70-8311
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
OLS ACQUISITION CORP. ("Acquisition Corp.")
OLS ENERGY - BERKELEY ("Berkeley")
One Upper Pond Road
Parsippany, New Jersey 07054
(Names of companies filing this statement and addresses
of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
(Name of top registered holding company parent of applicants)
Don W. Myers, Vice President Berlack, Israels & Liberman
and Treasurer Douglas E. Davidson, Esq.
M.A. Nalewako, Secretary 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, New Jersey 07054
B.L. Levy, President
K.A. Tomblin, Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
________________________________________________________________
(Names and addresses of agents for service)
<PAGE>
Acquisition Corp. and Berkeley hereby amend their
Application on Form U-1, docketed in SEC File No. 70-8311, as
follows:
1. By amending ITEM I thereof so as to read in its
entirety as follows:
"ITEM I DESCRIPTION OF PROPOSED TRANSACTIONS.
1. By Order dated August 1, 1989 (HCAR No. 35-24931)
the Commission authorized OLS Power Limited Partnership, a
Delaware limited partnership, of which Energy Initiatives, Inc.
("EI"), through its wholly-owned subsidiary, Camchino Energy
Corporation, holds a 50% partnership interest, to acquire
indirectly (the "Acquisition") through Acquisition Corp. all of
the common stock of Berkeley, OLS Energy - Chino ("Chino") and
OLS Energy - Camarillo ("Camarillo"). Berkeley, Chino and
Camarillo (the "OLS Companies") are each a lessee, under leases
(each a "Lease," and collectively, the "Leases") with General
Electric Capital Corporation ("GECC") or wholly-owned
subsidiaries thereof, of operating cogeneration facilities
located in California (the "Facilities"), each of which is a
qualifying facility under the Public Utility Regulatory Policies
Act of 1978. Berkeley's Facility is located at the University of
California at Berkeley; Chino's Facility is located at the Chino
Institute for Men in Chino and Camarillo's Facility is located at
the Camarillo State Hospital in Camarillo. The Leases expire, in
the case of Chino and Camarillo, on December 31, 2007, and in the
case of Berkeley, on August 7, 2007, but may be renewed, subject
to certain conditions, for up to 10 years at the lessee's option.
Rent payable during such renewal term would be the then fair
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market rent for the respective Facility, or, for an initial three
year renewal term, an amount which has been agreed upon if the
renewal option which provides for payment of rent in such agreed
upon amount is elected by the lessee.
2. Pursuant to long-term Energy Service Agreements
with the State of California, acting through its Department of
General Services, in the case of Camarillo and Chino, and the
Regents of the University of California (the "University"), in
the case of Berkeley (the "Energy Service Agreements"), the OLS
Companies sell electricity and/or steam to their respective host
institutions. The Energy Service Agreements also provide that
the host institutions are entitled to receive rebates on their
purchases of steam and electricity in amounts based on the cash
remaining after the costs and expenses of leasing, operating and
maintaining the Facilities have been paid or provided for.
Excess electricity and capacity is sold pursuant to separate
power purchase agreements with Southern California Edison
Company, in the cases of Chino and Camarillo, and Pacific Gas &
Electric Corporation, in the case of Berkeley.
3. At the time of the Acquisition, each of the OLS
Companies was a party to a Revolving Credit Agreement (each a
"Credit Agreement," and collectively, the "Credit Agreements")
with GECC which provided for the short-term working capital
requirements of its respective Facility and had each issued
secured promissory notes to GECC evidencing their respective
borrowings under their respective Credit Agreements.
4. By Orders in SEC File No. 70-7725 dated February
9, 1990 (HCAR No. 35-25038), December 26, 1990 (HCAR No. 35-
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25230), and July 12, 1991 (HCAR No. 35-25348), and by Orders in
SEC File No. 70-7939 dated March 26, 1992 (HCAR No. 35-25501) and
December 23, 1992 (HCAR No. 35-25717), the Commission authorized
Berkeley to enter into amendments to its Credit Agreement which,
among other things, increased the aggregate amount of the
borrowings which may be outstanding at any time thereunder from
$1,000,000 to $1,250,000, extended the time during which
borrowings may be made thereunder to December 31, 1994, and
reduced the rate of interest payable on borrowings outstanding to
3% from 5% over the Prime Rate, as defined therein.
5. After the Acquisition, each of the OLS Companies
was unable to generate sufficient revenue from sales of steam and
electricity to pay its operating expenses and rent under its
Lease on a current basis. In order to remedy this problem, the
OLS Companies ultimately reached agreement with GECC and their
host institutions to restructure their Leases and Energy Services
Agreements. On August 30, 1991, Chino and Camarillo entered into
agreements with GECC and their respective host institutions
which, among other things, reduced the rent payable to GECC under
their respective Leases, increased the amount each could borrow
and reduced the rate of interest payable under their respective
Credit Agreements and reduced certain rebates payable to their
host institutions under their respective Energy Service
Agreements. The amendments to Chino's and Camarillo's Credit
Agreements were authorized by Orders in SEC File No. 70-7725
dated February 9, 1990 (HCAR No. 35-25038) and December 26, 1990
(HCAR 35-25230).
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6. Berkeley has continued negotiations with GECC and
the University to restructure its Lease, Energy Services
Agreement, Credit Agreement and related agreements (the
"Restructure"). The negotiations have progressed to the point
where the parties have reached an agreement in principle on the
terms and conditions of such Restructure which are substantially
similar to the terms and conditions of the Chino and Camarillo
restructurings.
7. The Restructure contemplates, among other things,
that (i) rent payable to GECC under Berkeley's Lease will be
reduced, effective December 31, 1993, by approximately $780,000
per year and will be payable quarterly in amounts which track
expected revenue, rather than semi-annually in equal payments;
and (ii) rebates payable to the University under the Energy
Services Agreement will be reduced or deferred to increase the
cash retained by Berkeley to pay operating expenses.
8. The Restructure further contemplates that GECC
will make available to Berkeley a loan facility (the "Overhaul
Loan Facility") under the Berkeley Credit Agreement providing for
borrowings by Berkeley of up to $1,000,000 outstanding from time
to time to fund the cost of major repairs, non-routine
maintenance activities and overhauls of its Facility, provided
that the initial advance under the Overhaul Loan Facility may,
under certain circumstances, be used to pay amounts due fuel
suppliers and the operator of the Facility, costs incurred to
consummate the Restructure, prepayments of working capital
advances and rent under Lease. Borrowings under the Overhaul
Loan Facility may be made from time to time until August 7, 2007,
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would bear interest at a rate per annum of 3% in excess of the
Reference Rate, as defined, and would be repayable on a fixed
amortization schedule (determined at the time each loan is made)
over the lesser of (a) three years or (b) the time remaining
until August 7, 2007. The obligation of GECC to make each loan
under the Overhaul Loan Facility would be subject, among other
conditions, to the delivery of certain documentation, the absence
of a material adverse change in the financial condition of
Berkeley, the showing by Berkeley in form and substance
satisfactory to GECC that Berkeley will have sufficient cash to
repay the loan and the absence of a default under, among other
agreements, the amended Lease and the amended Credit Agreement.
9. Berkeley's Credit Agreement would also be amended
to (a) change the aggregate amount of the borrowings which may be
outstanding at any time thereunder to the lesser of (i)
$1,250,000, or (ii) $1,500,000 less the aggregate face amount of
outstanding letters of credit issued under the amended Credit
Agreement, (b) extend the period during which borrowings may be
made thereunder until August 7, 2007 and, (c) provide that the
obligation of GECC to make each loan under the Credit Agreement
would be subject, among other conditions, to the delivery of
certain documentation and the absence of a default under, among
other agreements, the amended Lease and the amended Credit
Agreement. Outstanding borrowings under the amended Credit
Agreement would be required to be repaid in full annually and
prepaid to the extent Berkeley has cash available to make
prepayments which is not reasonably required to pay operation,
maintenance and overhaul expenses. Outstanding borrowings could
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be prepaid at any time without penalty, except that prepayments
of borrowings under the Overhaul Loan Facility made without
GECC's consent would reduce GECC'S commitment thereunder by the
aggregate amount of such prepayments. The Credit Agreement would
also be amended to provide for an origination fee of $2,500 for
the issuance of any letters of credit in replacement of those
presently outstanding thereunder, plus an annual fee of 1.0% per
annum of the face amount of any such replacement letter of
credit.
10. As part of the Restructure, Acquisition Corp. will
pledge the stock of Berkeley to U.S. Trust Company of New York,
the Owner Trustee and lessor of Berkeley's Facility under its
Lease, as security for the obligations of Berkeley under its
amended Credit Agreement and in connection with the Restructure.
11. The Restructure may result in a reduction in the
value of Acquisition Corp.'s investment in Berkeley. However,
operating losses incurred by Berkeley, as well as by Chino and
Camarillo, and a reduction in the value of Acquisition Corp.'s
investments in Chino and Camarillo recorded in connection with
the restructure of their Leases and Energy Service Agreements,
has reduced the value of EI's investment in Acquisition Corp. to
zero and it cannot be reduced further. Therefore, the
Restructure will not result in any reduction in the value of EI's
investment in Acquisition Corp.
12. Accordingly, (a) Berkeley proposes to enter into
amendments to its Credit Agreement to (i) provide for the
Overhaul Loan Facility with GECC and borrow thereunder from time
to time prior to August 7, 2007 in amounts of up to $1,000,000 at
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any time outstanding and issue to GECC its promissory note
evidencing such borrowings, (ii) change the aggregate amount of
borrowings which may be outstanding at any time thereunder to the
lesser of (A) $1,250,000, or (B) $1,500,000 less the aggregate
face amount of outstanding letters of credit issued thereunder,
and (iii) extend the time during which borrowings may be made
thereunder and during which letters of credit may be outstanding
thereunder to August 7, 2007 and provide for an origination fee
of $2,500 for the issuance of letters of credit in replacement of
those presently outstanding thereunder, plus an annual fee of 1%
per annum of the face amount of any such replacement letter of
credit, and (b) Acquisition Corp. proposes enter into a pledge
agreement pledging the stock of Berkeley to secure the
obligations of Berkeley under its amended Credit Agreement and
the Restructure.
13. None of the proceeds from borrowings under the
amended Credit Agreement would be used to acquire any interest in
an exempt wholesale generator, as defined under Section 32 of the
Act ("EWG"), or a foreign utility company, as defined under
Section 33 of the Act ("FUCO"), or any rights under a service,
sales or construction agreement with any EWG or FUCO.
14. Upon the issuance of a Commission Order granting
the authority herein requested, Berkeley will relinquish its
remaining authority in SEC File No. 70-7939."
2. By amending ITEM III thereof so as to read in its
entirety as follows:
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<PAGE>
"ITEM III APPLICABLE STATUTORY PROVISIONS.
Sections 6(a), 7, 9(a), 10, 12(a) and 12(b) of the Act
and Rule 45 thereunder are applicable to the proposed amendment
of Berkeley's Credit Agreement and the proposed pledge by
Acquisition Corp. of the stock of Berkeley. The Restructure of
Berkeley's Lease and Energy Services Agreement are not believed
to be subject to the Commission's jurisdiction under the Act. It
is believed that the sale by Berkeley of its promissory notes to
GECC under the amended Credit Agreement and Overhaul Loan
Facility would be exempt from the competitive bidding
requirements of Rule 50 under the Act by virtue of Rule
50(a)(2)."
3. By amending ITEM VI thereof so as to read in its
entirety as follows:
"ITEM VI EXHIBITS AND FINANCIAL STATEMENTS.
(a) Exhibits:
A-1 - Form of Note evidencing borrowings made
under the Overhaul Loan Facility --
Incorporated by reference to form of
note contained in Exhibit B.
A-2 - Form of Note pursuant to Revolving
Credit Agreement -- Incorporated by
reference to form of note contained in
Exhibit B.
A-3 - Form of Pledge Agreement - to be filed
by amendment.
B - Form of amended and restated Credit
Agreement - to be filed by amendment.
C - None.
D - None.
E - None.
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G - Source and Application of Funds State-
ment - to be filed by amendment.
F-1 - Opinion of Berlack, Israels & Liberman -
to be filed by amendment.
F-2 - Opinion of Morrison & Foerster - to be
filed by amendment.
H - Proposed form of public notice.
(b) Financial Statements:
1. - OLS Energy - Berkeley Consolidated Bal-
ance Sheets, actual and pro forma, as at
September 30, 1993 and Statements of
Operations, actual and pro forma, for
the twelve months ended September 30,
1993; pro forma journal entries.
2. - GPU Consolidated Financial Statements,
actual and pro forma, have been omitted
as the proposed transactions will not
have a material effect thereon.
3. - None.
4. - None."
4. By filing the following exhibits in ITEM 6 hereof:
(a) Exhibits:
G - Source and Application of Funds
Statement
(b) Financial Statements:
1. - OLS Energy - Berkeley Consolidated Bal-
ance Sheets, actual and pro forma, as at
September 30, 1993 and Statements of
Operations, actual and pro forma, for
the twelve months ended September 30,
1993; pro forma journal entries.
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<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
OLS ACQUISITION CORP.
OLS ENERGY-BERKELEY
By:
Bruce L. Levy, President
Date: February 3, 1994
<PAGE>
Exhibit and Financial Statements to be filed by EDGAR
Exhibit:
G - Source and Application of Funds Statement
Financial Statements:
1. - OLS Energy - Berkeley Consolidated Balance
Sheets, actual and pro forma, as at September
30, 1993 and Statements of Operations, actual
and pro forma, for the twelve months ended
September 30, 1993; pro forma journal
entries.
<PAGE>
<TABLE>
Exhibit G
O.L.S. ENERGY - BERKELEY
ESTIMATED SOURCE AND APPLICATION OF FUNDS
($Millions)
<CAPTION>
1993 1994 1994 1995
4th 1st 2nd 3rd 4th 1st 2nd 3rd
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income (Loss) (0.1) (0.8) 0.1 0.4 (0.2) 0.1 0.1 0.4
Cumulative
Short-Term
Financing
Requirements (0.1) (0.9) (0.8) (0.4) (0.6) (0.5) (0.4) 0.0
<PAGE>
</TABLE>
<TABLE>
Financial Statements
Item 6(b) 1
Page 1 of 4
Berkeley
Balance Sheets
At September 30, 1993
(In Thousands)
<CAPTION>
Adjustments
ASSETS Actual (See page 4) Pro Forma
<S> <C> <C> <C>
Current Assets:
Cash $ 266 $ 1 000 $ 1 266
Restricted Investments 16 16
Accounts Receivable 2 694 2 694
Fuel Inventory 169 169
Prepaid Expenses 41 41
Material & Supplies 26 26
Total 3 212 1 000 4 212
Equipment Under Capital Lease, Net
of Amortization 28 471 28 471
Goodwill, Net of Amortization 2 255 2 255
Total Assets $ 33 938 $ 1 000 $ 34 938
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements
Item 6(b) 1
Page 2 of 4
Berkeley
Balance Sheets
At September 30, 1993
(In Thousands)
<CAPTION> Actual Adjustments
(Unaudited) (See page 4) Pro Forma
Liabilities and Stockholders Equity
<S> <C> <C> <C>
Current Liabilities:
Accounts Payable $ 1 280 $ 1 280
Accrued Interest 1 346 85 1 431
Income Tax Payable (519) (34) (553)
Obligation Under Capital Lease 1 135 1 135
Note Payable 204 1 000 1 204
Other Accrued Liabilities 440 440
Accrued Property Taxes (97) (97)
Total Current Liabilities 3 789 1 051 4 840
Obligation Under Capital Lease 27 311 27 311
Intercompany Accts. Payable 237 237
Plant Dismantlement Reserve 139 139
Total Liabilities 31 476 1 051 32 527
Stockholders Equity:
Common Stock, No Par Value; 1,000,000
Shares Authorized; 1000 Shares
Issued and Outstanding 1 1
Additional Paid in Capital 3 984 3 984
Accumulated Deficit (1 523) (51) (1 574)
Total Stockholders Equity 2 462 (51) 2 411
Total Liabilities and Equity $ 33 938 $ 1 000 $ 34 938
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements
Item 6(b)1
Page 3 of 4
O.L.S. Energy - Berkeley
Statement of Operations
For The Twelve Months Ended September 30, 1993
(In Thousands)
<CAPTION>
Actual Adjustments
(Unaudited) (See page 4) Pro Forma
<S> <C> <C> <C>
Operating Revenues:
Electricity $ 8 568 $ 8 568
Steam 3 987 3 987
Total Revenue 12 555 12 555
Operating Expenses:
Fuel 6 411 6 411
Operations and Maintenance 2 277 2 277
Interest Expense - Capital Lease 2 783 2 783
Depreciation and Amortization 1 281 1 281
Other 1 024 1 024
Total Operating Expenses 13 776 13 776
Net Operating Income (1 221) (1 221)
Other Income (Expense) 469 $ (85) 384
Net Income Before Tax (781) (85) (866)
Income Taxes 199 34 233
Net Income (Loss) $ (582) $ (51) $ (633)
<FN>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Statements
Item 6(b)1
Page 4 of 4
O.L.S. Energy - Berkeley
Pro Forma Adjustments
At September 30, 1993
(In Thousands)
<CAPTION>
(1)
<S> <C> <C>
Cash and Restricted Investments $ 1 000
Notes Payable $ 1 000
To reflect the increase to $1
million for an overhaul loan
facility under the proposed
New Credit Agreement.
(2)
Other Expense 85
Accrued Interest 85
To reflect annual interest
requirement on $1 million of
the overhaul loan facility under
the proposed New Credit Agreement
at an assumed annual rate of 8.5%.
(3)
Income Tax Receivable 34
Income Taxes 34
To reflect the decrease in the provision for State and Federal Income
Taxes at a rate of 40.13%.
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</TABLE>
