CERTIFICATE OF NOTIFICATION
Filed by
THE SOUTHERN COMPANY
Pursuant to the order of the Securities and Exchange Commission
dated December 13, 1994, in the matter of File No. 70-8505.
- - - - - - - -
The Southern Company ("Southern"), on its own behalf and on
behalf of its new wholly-owned electric utility subsidiary
company, Mobile Energy Services Company, Inc. ("Mobile Energy"),
hereby certifies to said Commission, pursuant to Rule 24, that
the following transactions have been consummated in accordance
with and for the purposes represented in the Application or
Declaration in the above-referenced proceeding and the order of
this Commission herein:
1. On December 15, 1994, Mobile Energy issued to Southern
and Southern acquired from Mobile Energy 1000 shares of
Mobile Energy's common stock, par value $1.00 per
share. On such date, Southern made investments in
Mobile Energy of approximately $85 million in the form
of purchases of Mobile Energy's common stock and cash
capital contributions.
2. On December 16, 1994, Mobile Energy issued its
promissory note to Southern and pursuant thereto
borrowed approximately $180 million.
3. On December 16, 1994, Mobile Energy purchased from
Scott Paper Company ("Scott") all of Scott's right,
title and interest in the Energy Complex and certain
related assets, all as more particularly described in
the Asset Purchase Agreement filed as an exhibit to the
Application or Declaration, for an aggregate purchase
price of $350 million, a portion of which ($85 million)
was represented by Mobile Energy's assumption of
Scott's obligations under financing agreements between
Scott and the Industrial Development Board of the City
of Mobile, Alabama relating to $85 million principal
amount of outstanding tax-exempt industrial revenue
development bonds due 2019.
4. On December 16, 1994, Southern executed and delivered
to Scott guaranties of Mobile Energy's obligations
under three separate environmental indemnity agreements
between Mobile Energy and Scott or, as applicable, S.D.
Warren Company and under the assumption agreement
between Mobile Energy and Scott with respect to the $85
million tax-exempt bonds referred to above.<PAGE>
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5. On December 16, 1994, Mobile Energy executed and
delivered to Scott and, as applicable, S.D. Warren
Company, various other agreements relating to the
operation of the Energy Complex, including the Energy
Services Agreements and the Master Operating Agreement,
as the same were filed as exhibits to the Application
or Declaration.
6. On December 19, 1994, Mobile Energy entered into
interest rate swap agreements with Barclays Bank PLC
with respect to the $85 million principal amount of
tax-exempt bonds assumed by Mobile Energy and $224
million principal amount of notes proposed to be sold
by Mobile Energy on or before June 30, 1995, with
respect to which this Commission has reserved
jurisdiction. Southern executed and delivered to
Barclays Bank PLC its guaranty of Mobile Energy's
obligations under the interest rate swap agreements.
7. A further Certificate of Notification will be filed
following consummation of the transactions with respect
to which this Commission has reserved jurisdiction.
8. Filed herewith is the following exhibit:
Exhibit F - Opinion of Troutman Sanders dated
December 28, 1994.
Dated December 28, 1994 THE SOUTHERN COMPANY
By /s/Tommy Chisholm
Tommy Chisholm
Secretary<PAGE>
EXHIBIT F
TROUTMAN SANDERS
600 PEACHTREE STREET, SUITE 5200
ATLANTA, GEORGIA 30308-2216
(404) 885-3000
December 28, 1994
Securities and Exchange Commission
Washington, D.C. 20549
Re: The Southern Company - Form U-1 Application or
Declaration (File No. 70-8505)
Ladies and Gentlemen:
We are familiar with the statement on Form U-1 referred to
above, as amended, and are furnishing this opinion with respect
to the transactions proposed therein, which include, among other
proposals, (i) the acquisition by The Southern Company, a
Delaware corporation ("Southern"), of all of the issued and
outstanding common stock, $1 par value (the "Stock"), of Mobile
Energy Services Company, Inc., an Alabama corporation ("Mobile
Energy") for consideration not to exceed $105 million; (ii) the
making of an interim loan by Southern to Mobile Energy in an
amount not to exceed $190 million, such interim loan to mature
not later than June 30, 1995; (iii) the acquisition by Mobile
Energy of certain facilities and equipment constituting the
energy and recovery complex ("Energy Complex") at Scott Paper
Company's pulp and paper mill in Mobile, Alabama; (iv)
Southern's guaranty of Mobile Energy's obligations under
environmental indemnity agreements with Scott Paper Company and,
as applicable, S. D. Warren Company; (v) the assumption by Mobile
Energy of Scott Paper Company's obligations under a facility
lease and other instruments relating to $85 million principal
amount of outstanding industrial revenue development bonds, and
Southern's guaranty of Mobile Energy's obligations under the
assumption documents; and (vi) Mobile Energy's issuance of notes
(the "Notes") in an aggregate principal amount not to exceed $230
million, and, in connection therewith, Southern's guaranty in
lieu of cash reserves that may be required by the purchasers of
such Notes.
We are of the opinion that:
(a) Southern and Mobile Energy are each a validly
organized and duly existing corporation under the laws of
the State of its incorporation;
(b) the transactions described in the Application or
Declaration on Form U-1 have been consummated in accordance<PAGE>
Securities and Exchange Commission
December 28, 1994
Page 2
with such statement, as amended, and the order of this
Commission dated December 13, 1994, except to the extent
that jurisdiction with respect to any matter was expressly
reserved;
(c) all state laws applicable to the proposed
transactions have been complied with;
(d) certificates for the Stock have been duly executed
and issued by Mobile Energy, and Southern, as the holder
thereof, is entitled to the rights and privileges
appertaining thereto set forth in the Certificate of
Incorporation of Mobile Energy defining such rights and
privileges;
(e) the guaranties of Southern in respect of (i) the
Tax Exempt Bonds, (ii) Mobile Energy's obligations under the
environmental indemnities, and (iii) Mobile Energy's
obligations under the interest rate swap instruments are
each legal, valid and binding obligations of Southern; and
(f) the consummation of the transactions described
above and of the other transactions described in the
Application or Declaration, as amended, did not violate the
legal rights of the holders of any securities issued by
Southern, Mobile Energy, or any associate company thereof.
We hereby consent to the use of this opinion in connection
with the above-mentioned statement on Form U-1, as amended, and
to the filing thereof with the Commission at the time of the
filing by Southern of its certificate of notification pursuant to
Rule 24.
Very truly yours,
/s/Troutman Sanders
TROUTMAN SANDERS<PAGE>
