File No. 70-9071
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
__________________________________________
AMENDMENT NO. 3 TO FORM U-1 DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company filing this statement
and address of principal executive office)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Vice President and Treasurer
Cinergy Corp.
(address above)
(Name and address of agent of service)
Applicant requests that the Commission send copies of all notices, orders
and communications in connection herewith to:
Jerome A. Vennemann James R. Lance
Associate General Counsel Manager - Corporate Finance Cinergy
Corp. & Financial Risk Management
(address above) Cinergy Corp. (address above)
William T. Baker, Jr.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
The Declaration on Form U-1 in this proceeding, as previously amended, is
further amended as follows:
1. The reference to Release No. 35-26723 in Item 1.B.5 ("Proposed
Increased Investment Authority to invest in Exempt Entities") is incorrect,
the correct citation being Release No. 35-26486 (issued March 8, 1996).
Accordingly, Item 1.B.5 is revised to make this correction and, as so
revised, reads in its entirety as follows:
5. Proposed Increased Authority to Invest in Exempt Entities /File
No. 70-9011
Cinergy has pending a proposal (see amended application-declaration
in File No. 70-9011; Release No. 35-26698) ("100% Application") pursuant to
which Cinergy seeks to apply the net proceeds of certain financing
transactions - consisting of those authorized in Release Nos. 35-26486,
26477 and 26488 (to be superseded, as to the latter two orders, upon
issuance of the Commission's order herein) - to investments in Exempt
Entities, provided that Cinergy's "aggregate investment" will not exceed
100% of Cinergy's "consolidated retained earnings" (each as defined in rule
53(a)(1)).
2. Item 1.H ("Rule 53 Analysis") is hereby restated in its entirety to
read as follows:
H. Rule 53 Analysis
Rule 53(a) provides that in determining whether to approve the issue
or sale of a security by a registered holding company for purposes of
financing the acquisition of an EWG, or the guarantee of a security of an
EWG by a registered holding company, the Commission shall not make a
finding that such security is not reasonably adapted to the earning power
of such company or to the security structure of such company or companies
in the same holding company system, or that the circumstances are such as
to constitute the making of such guarantee an improper risk for such
company, if certain conditions set forth in rule 53(a) and (b) are met.
As set forth below, Cinergy satisfies all of those conditions. As
referred to elsewhere herein (Item 1.B.5; Item 1.E), Cinergy has pending a
proposal to invest the proceeds of various financing transactions,
including those proposed herein, in Exempt Entities provided that Cinergy's
"aggregate investment" does not exceed Cinergy's "consolidated retained
earnings." Cinergy's rule 53(c) analysis is set forth in the 100%
Application.
Rule 53(a)(1): At June 30, 1997, Cinergy had invested, directly or
indirectly, an aggregate of approximately $500 million in EWGs and FUCOs.
The average of the consolidated retained earnings of Cinergy reported on
Form 10-K or Form 10-Q, as applicable, for the four consecutive quarters
ended June 30, 1997 was approximately $1.01 billion. Accordingly, based on
Cinergy's "consolidated retained earnings" at June 30, 1997, and taking
into account Cinergy's "aggregate investment" as of that date, Cinergy had
available investment capacity under rule 53 of approximately $5 million.
Rule 53(a)(2): Cinergy maintains books and records enabling it to
identify investments in and earnings from each EWG and FUCO in which it
directly or indirectly holds an interest. At present, Cinergy does not
hold any interest in a domestic EWG; Rule 53(a)(2)(i) is therefore
inapplicable.
In accordance with Rule 53(a)(2)(ii), the books and records and
financial statements of each foreign EWG and FUCO which is a "majority-owned
subsidiary company" of Cinergy are kept in conformity with and
prepared according to U.S. generally accepted accounting principles
("GAAP"). Cinergy will provide the Commission access to such books and
records and financial statements, or copies thereof, in English, as the
Commission may request.
In accordance with Rule 53(a)(2)(iii), for each foreign EWG and FUCO
in which Cinergy directly or indirectly owns 50% or less of the voting
securities, Cinergy will proceed in good faith, to the extent reasonable
under the circumstances, to cause each such entity's books and records to
be kept in conformity with, and the financial statements of each such
entity to be prepared according to, GAAP. If such books and records are
maintained, or such financial statements are prepared, according to a
comprehensive body of accounting principles other than GAAP, Cinergy will,
upon request of the Commission, describe and quantify each material
variation from GAAP in the accounting principles, practices and methods
used to maintain such books and records and each material variation from
GAAP in the balance sheet line items and net income reported in such
financial statements, as the case may be. In addition, Cinergy will
proceed in good faith, to the extent reasonable under the circumstances, to
cause access by the Commission to such books and records and financial
statements, or copies thereof, in English, as the Commission may request,
and in any event will make available to the Commission any such books and
records that are available to Cinergy.
Rule 53(a)(3): No more than 2% of the employees of Cinergy's
operating utility subsidiaries, at any one time, directly or indirectly,
render services to EWGs and FUCOs.
Rule 53(a)(4): Cinergy will simultaneously submit a copy of this
statement and of any Rule 24 certificate hereunder, as well as a copy of
Cinergy's Form U5S and Exhibits H and I thereto, to each public utility
commission having jurisdiction over the retail rates of any Cinergy utility
subsidiary.
Rule 53(b): The provisions of Rule 53(a) are not made inapplicable
to the authorization herein requested by reason of the provisions of Rule
53(b). Specifically:
Rule 53(b)(1): Neither Cinergy nor any 10% subsidiary thereof
(within the meaning of rule 53(b)(1)) is the subject of any pending
bankruptcy or similar proceeding.
Rule 53(b)(2): Cinergy's average consolidated retained earnings for
the four quarters ended June 30, 1997 were approximately $1.01 billion, as
compared to approximately $1 billion for the four quarters ended March 31,
1997, a net increase of $10 million.
Rule 53(b)(3): For the year ended December 31, 1996, Cinergy did
not report operating losses attributable to its direct and indirect
investments in EWGs and FUCOs in an amount greater than 5% of consolidated
retained earnings.
3. The following exhibit is filed herewith:
F-1 Preliminary Opinion of Counsel
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned company has
duly caused this statement to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: September 9, 1997
CINERGY CORP.
By: /s/William L. Sheafer
Vice President and Treasurer
EXHIBIT F-1
September 9, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cinergy Corp./File No. 70-9071
Ladies and Gentlemen:
I am Associate General Counsel of Cinergy Corp. ("Cinergy"), a
Delaware corporation and registered holding company under the Public
Utility Holding Company Act of 1935, as amended (the "Act") and am
furnishing this opinion as an exhibit to Cinergy's Declaration on Form U-1
in the above docket, as previously amended and as further amended by
Amendment No. 3 thereto filed concurrently herewith (such amended
statement, including any further amendments thereto, the "Application").
In the Application, Cinergy requests authority, among other things,
to issue and sell from time to time through December 31, 2002, upon the
terms and conditions set forth therein, (1) short-term notes and commercial
paper (collectively, the "Notes") in an aggregate principal amount not to
exceed $2 billion at any time outstanding, and (2) up to 30,867,385
additional shares of Cinergy common stock, $0.01 par value per share (the
"Additional Shares").
In connection with this opinion, I have reviewed the Application
and such documents, records and other materials as I have deemed necessary
or appropriate in order to render this opinion.
I am a member of the Bar of the State of Ohio and do not purport to
be an expert on the laws of any other jurisdiction. I have examined the
Delaware General Corporation Law ("DGCL") to the extent necessary to
express the opinions set forth herein. The opinions expressed below are
limited solely to matters governed by the laws of the State of Ohio and the
DGCL. This opinion does not address the potential applicability to the
proposed transactions of any state securities or Blue Sky laws.
Based upon and subject to the foregoing, and assuming that the
proposed transactions are carried out in accordance with (i) the
Application and the Commission's order to be issued with respect thereto,
and (ii) all other requisite approvals and authorizations, corporate or
otherwise, I am of the opinion that:
(a) Cinergy is validly incorporated and duly existing under the
laws of the State of Delaware.
(b) All state laws applicable to the proposed transactions will
have been complied with.
(c) The Notes will be valid and binding obligations of Cinergy
enforceable in accordance with their terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by applicable principles of equity
(regardless of whether such enforceability is sought in a proceeding at law
or in equity).
(d) The Additional Shares, when properly issued, delivered and
paid for, will be legally issued, fully paid and non-assessable, and the
holders thereof will be entitled to the rights and privileges appertaining
thereto as set forth in Cinergy's certificate of incorporation.
(e) The consummation of the proposed transactions will not violate
the legal rights of the holders of any securities issued by Cinergy or any
associate company thereof.
I hereby consent to the use of this opinion in connection with the
Application.
Very truly yours,
/s/Jerome A. Vennemann
Associate General Counsel
