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File No. 70-8519
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
___________________________________________
TRANSOK, INC.
TRANSOK ACQUISITION COMPANY
TRANSOK GAS TRANSMISSION COMPANY
TRANSOK GAS GATHERING COMPANY
P.O. Box 3008
Tulsa, Oklahoma 74101
(Name of companies filing this statement and
address of principal executive offices)
___________________________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
___________________________________________
Stephen J. McDonnell, Treasurer
Central and South West Corporation
P.O. Box 660164
Dallas, Texas 75202
A. Dean Fuller, President
Transok, Inc.
P.O. Box 3008
Tulsa, Oklahoma 74101
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
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Transok, Inc. ("Transok"), an Oklahoma corporation, is a wholly
owned non-utility subsidiary of Central and South West Corporation ("CSW"),
a Delaware corporation and a registered holding company under the Public
Utility Holding Company Act of 1935, as amended (the "Act"). CSW has four
principal electric operating utility subsidiaries: Central Power and Light
Company ("CPL"), Public Service Company of Oklahoma ("PSO"), Southwestern
Electric Power Company ("SWEPCO") and West Texas Utilities Company ("WTU")
(collectively, the "Operating Companies").
Transok, located in Tulsa, Oklahoma, is an intrastate natural
gas transmission, gathering, storage, processing and marketing company. In
addition to providing natural gas services in support of the fuel
requirements of CPL, SWEPCO and WTU, Transok provides PSO with gas
transportation services for all its gas requirements and gas storage to
balance its daily gas use and administers all its gas supply contracts. As
reported in the Certificate of Notification for the year ended December 31,
1994 filed with the Commission by Transok, in 1994 Transok derived
$430,963,000 of revenues from other companies in the CSW system and
$309,609,000 of revenues from non-associated companies. Transok's pipeline
systems are located in Oklahoma, Texas and Louisiana. Transok also owns
and operates seven gas processing plants, gas compression systems used in
transmission and storage operations, and an underground gas storage
reservoir in Oklahoma.
Transok Acquisition Company ("TAC"), a Delaware corporation, is
a wholly and directly owned subsidiary of Transok. Transok Gas
Transmission Company ("Transmission") and Transok Gas Gathering Company
("Gathering") are Delaware corporations and wholly and directly owned non-
utility subsidiaries of TAC. Transok, TAC, Transmission and Gathering (the
"Applicant Companies") hereby file this Amendment No. 2 to the Form U-1
Application-Declaration in
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this File No. 70-8519 for the purposes of: (i) permitting TAC,
Transmission and Gathering to join with Transok as companies filing the
Application-Declaration; and (ii) amending Items 1, 3, 5 and 6 so that the
Application-Declaration reads in its entirety as follows.
Item 1. Description of Proposed Transactions
(A) The Mergers
The Applicant Companies hereby request authority to simplify
their corporate structure by combining TAC, Transmission and Gathering
into Transok by means of the merger transactions described below (the
"Mergers"). The Mergers would simplify the corporate structure of Transok
by eliminating one of its first-tier subsidiaries and two of its second-
tier subsidiaries. Set forth in Exhibits 5 and 6 are diagrams of the
current and proposed Transok corporate structures.
By order dated September 26, 1991, the Commission authorized
Transok's acquisition of the natural gas gathering, transmission and
marketing business of TEX/CON Oil and Gas Company ("TEX/CON"), a wholly
owned subsidiary of BP Exploration, Inc. (HCAR No. 25385, File No. 70-7872,
the "TEX/CON Order"). Transok acquired the natural gas gathering,
transmission and marketing business ("GTM Business") of TEX/CON for the
primary purpose of improving Transok's ability to provide the Operating
Companies with a reliable and economical source of natural gas for their
electric power generation needs. TEX/CON's GTM Business: (i) provided
gathering and transportation services through interests in three major
regional natural gas pipeline systems; (ii) marketed natural gas, through
its own and other pipeline systems, to markets across the United States;
and (iii) through its interests in gas processing plants, processed volumes
of natural gas and extracted natural gas liquids, marketing the gas and
liquids to a variety of customers.
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TEX/CON had operated its GTM Business through assets owned directly
by TEX/CON and indirectly through its wholly owned subsidiary, Lear
Petroleum Corporation ("Lear"). Prior to the acquisition by Transok,
TEX/CON transferred all its assets related to the GTM Business to Lear and
its subsidiaries. On September 27, 1991, Transok, through its wholly owned
subsidiary Transok Acquisition Company ("TAC"), purchased all of the
outstanding common stock of Lear from TEX/CON, thereby acquiring the GTM
Business. Effective October 25, 1991, Lear was merged into TAC, with TAC
being the surviving entity. On December 17, 1991, TAC changed the names of
three of the four Lear subsidiaries acquired from TEX/CON to Transok Gas
Transmission Company, Transok Gas Company ("Marketing") and Transok Gas
Gathering Company. On January 15, 1992, the fourth Lear subsidiary, a
company organized under the laws of the Netherlands Antilles, was
domesticated in Delaware under the name Transok Gas Processing Company
("Processing"). Thus, Transok is the direct and sole owner of TAC, and TAC
is the direct and sole owner of the former operating subsidiaries of Lear
and TEX/CON: Transmission, Gathering, Processing and Marketing. The gas
processing assets that Transok owned prior to the TEX/CON acquisition were
transferred to Processing on December 31, 1992. On December 30, 1994, the
Applicant Companies entered into an Agreement and Plan of Liquidation and
Merger (the "Plan of Liquidation") pursuant to which, on that day,
Transmission and Gathering declared and paid a dividend to TAC, and TAC
declared and paid a dividend to Transok, of all the property, assets and
rights of Transmission and Gathering that were in excess of capital and
unearned surplus of Transmission, Gathering and TAC, respectively, in
compliance with Rule 46 under the Act, including and subject to all of the
liabilities and obligations related to the property, assets and rights
transferred, except the following assets: (i) intercompany accounts
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receivable at least equal to the Common Stock account of each such Company;
(ii) the shares of Common Stock of Transmission, Gathering, Processing and
Marketing held by TAC; and (iii) property, assets, rights, liabilities and
obligations of TAC not subject to the dividends from Transmission and
Gathering. The Plan of Liquidation also provided for the Mergers, subject
to the obtaining of the authority requested by this Application-
Declaration.
The Mergers would be accomplished by (i) the merger of TAC into
Transok, with Transok being the surviving corporation, and (ii) the
subsequent mergers of Transmission and Gathering into Transok, with Transok
being the surviving corporation. After the completion of the Mergers,
Transok would have three first-tier subsidiaries (Processing, Marketing and
Transok Properties, Inc., a corporation that holds a 50% interest in the
partnership that owns Transok's headquarters office building in Tulsa
pursuant to authorization from the Commission (HCAR No. 35-25704, File No.
70-8065 (December 11, 1992)), and no second-tier subsidiaries. The current
Transok corporate structure is shown in Exhibit 5, and the proposed Transok
corporate structure after the Mergers is shown in Exhibit 6.
The dividends declared and paid by Transmission, Gathering and
TAC have been accounted for in accordance with generally accepted
accounting principles applicable to liquidating dividends. The assets and
liabilities of TAC, Transmission and Gathering were transferred to Transok
at their book values. The liquidating dividends did not result in any
change in the consolidated financial statements of Transok.
Transok believes that the liquidating dividends and the Mergers
will result in several benefits and efficiencies, including (i) a fairer
valuation of the assets of Transmission and Gathering for purposes of the
Oklahoma ad valorem tax, resulting in estimated annual tax savings of
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approximately $500,000; (ii) simplified and less costly internal and
external accounting operations; (iii) reduced and less costly
administrative functions in order to meet regulatory compliance and
reporting requirements; (iv) reduced managerial and administrative
activities of the relevant businesses; and (v) simplified and less costly
contracting procedures for both Transok and its customers.
(B) The Transfer of Gas Compression Assets
Transok also hereby requests authority to transfer certain
natural gas compression assets from Transok to Processing. Such
compression assets consist of compressors having an aggregate undepreciated
cost of approximately $92 million and ancillary measuring, regulating and
other equipment, tanks and rights-of-way having an aggregate undepreciated
cost of approximately $5 million (the "Compression Assets"). The
Compression Assets are used to compress natural gas in the course of its
gathering, transportation and storage. The transfer of the Compression
Assets from Transok to Processing would result in their reclassification
for purposes of the Oklahoma ad valorem tax, resulting in estimated annual
tax savings of between $300,000 and $400,000. The transfer would be
accounted for as a contribution by Transok to the capital of Processing.
Item 2. Fees, Commissions and Expenses
The estimate of the fees to be paid or incurred by CSW and
Transok in connection with the transactions are as follows:
Holding Company Act Filing Fee................. $ 2,000*
Counsel Fees:
Milbank, Tweed, Hadley & McCloy........... 15,000
Miscellaneous and incidental expenses,
including travel, telephone, copying
and postage............................... 1,000
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Total $18,000
____________________
* Actual amount.
Item 3. Applicable Statutory Provisions
Sections 9(a), 10 and 12(c) of the Act and Rules 23, 42 and 43
promulgated thereunder are or may be applicable to the proposed Mergers,
inasmuch as the Mergers may be considered as involving the acquisition,
retirement or redemption of securities by the issuers thereof upon the
mergers of the issuers into their respective parent companies. Section
12(f) of the Act and Rule 45(a) thereunder are or may be applicable to the
proposed transfer of the Compression Assets, as a capital contribution,
from Transok to Processing. To the extent any other sections of the Act or
Rules thereunder may be applicable to the proposed transactions, CSW and
the Applicant Companies request appropriate orders thereunder.
Item 4. Regulatory Filings and Approvals
No state regulatory authority and no federal regulatory
authority, other than the Commission under the Act, have jurisdiction over
the proposed transactions.
Item 5. Procedure
The Applicant Companies request that the Commission issue and
publish not later than November 18, 1994, the requisite notice under Rule
23 with respect to the filing of this Application-Declaration, such notice
to specify a date not later than December 9, 1994, as the date after which
an order granting and permitting this Application-Declaration to become
effective may be entered by the Commission, and that the Commission enter
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not later than December 12, 1994 an appropriate order granting and permitting
this Application-Declaration to become effective.
The Applicant Companies respectfully request that appropriate
and timely action be taken by the Commission in this matter in order to
permit consummation of the Mergers on or prior to December 30, 1994 in
order to be able to realize the benefits and efficiencies referred to above
during the full 1995 year and to have an appropriate transaction date for
accounting and regulatory compliance and reporting purposes. In any event,
the Applicant Companies request that the order granting and permitting the
Application-Declaration to become effective be made effective by the
Commission (with retroactive effect if necessary) as of a date not later
than December 30, 1994.
No recommended decision by a hearing officer or other
responsible officer of the Commission is necessary or required in this
matter. The Division of Corporate Regulation of the Commission may assist
in the preparation of the Commission's decision on this matter. There
should be no 30-day waiting period between the issuance and the effective
date of any order issued by the Commission in this matter, and the
Applicant Companies respectfully request that any such order be made
effective immediately upon the entry thereof.
Item 6. Exhibits and Financial Statements
Exhibit 1 - Preliminary opinion of Milbank, Tweed, Hadley
& McCloy, counsel for Transok.
Exhibit 2 - Final or "past tense" opinion of Milbank,
Tweed, Hadley and McCloy, counsel for Transok
(to be filed with Certificate of
Notification).
Amended
Exhibit 3 - Proposed Notice of Proceeding.
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Exhibit 4 - Balance Sheet as of March 31, 1995, and
Statement of Income for the 12 months ended
March 31, 1995, of Transok and consolidated
subsidiaries (to be filed by amendment).
Exhibit 5 - Current Corporate Structure of Transok, Inc.
System Companies (previously filed).
Exhibit 6 - Proposed Corporate Structure of Transok, Inc.
System Companies (previously filed).
Item 7. Environmental Effects
The proposed transaction does not involve major federal action
having a significant effect on the human environment. No federal agency
has prepared or is preparing an environmental impact statement with respect
to the proposed transaction.
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S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this document
to be signed on its behalf by the undersigned thereunto duly authorized.
DATED: July 6, 1995
TRANSOK, INC.
By: /s/A. DEAN FULLER
A. Dean Fuller
President and
Chief Executive Officer
TRANSOK ACQUISITION COMPANY
By: /s/A. DEAN FULLER
A. Dean Fuller
President and
Chief Executive Officer
TRANSOK GAS TRANSMISSION COMPANY
By: /s/ A. DEAN FULLER
A. Dean Fuller
President and
Chief Executive Officer
TRANSOK GAS GATHERING COMPANY
By: /s/ A. DEAN FULLER
A. Dean Fuller
President and
Chief Executive Officer
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INDEX OF EXHIBITS
NUMBER EXHIBIT METHOD
1 Preliminary opinion of Milbank, Tweed, Hadley &
McCloy, counsel for Transok. Electronic
2 Final or "past tense" opinion of Milbank,
Tweed, Hadley & McCloy, counsel for Transok (to
be filed with Certificate of Notification). --
3 Amended Proposed Notice of Proceeding. Electronic
4 Balance Sheets as of March 31, 1995, and Statement
of Income for the 12 months ended March 31, 1995, of
Transok and consolidated subsidiaries (to be filed
by amendment). --
5 Current Corporate Structure of Transok, Inc. System
Companies (previously filed). --
6 Proposed Corporate Structure of Transok, Inc. System
Companies (previously filed). --
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EXHIBIT 1
---------
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
July 6, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Transok, Inc.
Form U-1 Application
Dear Sirs:
We refer to Amendment No. 2 to the Form U-1 Application, File
No. 70-8519 (the "Amendment"), under the Public Utility Holding Company Act
of 1935, as amended (the "Act"), filed by Transok, Inc. ("Transok"), an
Oklahoma corporation and a wholly owned non-utility subsidiary of Central
and South West Corporation, a Delaware corporation and a registered holding
company and by certain subsidiaries of Transok. The Amendment relates to
Transok's request for authority under the Act (i) to merge such
subsidiaries into Transok and (ii) to transfer certain natural gas
compression equipment from Transok to another of its subsidiaries
(collectively, the "Transactions"). We have acted as special counsel for
Transok in connection with the filing of the Amendment and, as such
counsel, we are familiar with the corporate proceedings taken and to be
taken by Transok in connection with the Transactions.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of Transok, certificates of public
officials, certificates of officers and representatives of Transok and
other documents as we have deemed necessary to require as a basis for the
opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. As to various questions of fact
material to such opinions we have, when relevant facts were not
independently established, relied upon certificates by officers of Transok
and other appropriate persons and statements contained in the Amendment.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that, in the
event that the Transactions are consummated in accordance with the
Amendment, as it may be amended, and subject to the assumptions and
conditions set forth below:
1. All state laws applicable to the Transactions will have
been complied with.
2. The Transactions will not violate the legal rights of the
holders of any securities issued by Transok or any associate
company thereof.
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The opinions expressed above are subject to the following
assumptions or conditions:
a. The Transactions shall have been duly authorized
and approved to the extent required by state law by the Board
of Directors of Transok.
b. The Securities and Exchange Commission shall have
duly entered an appropriate order or orders granting and
permitting the Amendment to become effective.
c. The Transactions shall be in accordance with any
required approvals, authorizations, consents, certificates and
orders of any state commission or regulatory authority and all
such required approvals, authorizations, consents, certificates
and orders shall have been obtained and remain in effect.
d. No act or event other than as described herein
shall have occurred subsequent to the date hereof which would
change the opinions expressed above.
e. All legal matters incident to the Transactions
shall be satisfactory to us, including the receipt in
satisfactory form of opinions of other counsel qualified to
practice in jurisdictions pertaining to the Transactions in
which we are not admitted to practice.
We hereby consent to the use of this opinion as an exhibit to
the Amendment.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & MCCLOY
Milbank, Tweed, Hadley & McCloy
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EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Company Act of 1935 ("Act")
July __, 1995.
Notice is hereby given that the following filing(s) has/have
been made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments thereto is/are available for public
inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on
the application(s) and/or declaration(s) should submit their views in
writing by ____________, 1995 to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below. Proof
of service (by affidavit or, in case of any attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact or law that are disputed. A
person who so requests will be notified of any hearing, if ordered, and
will receive a copy of any notice or order issued in the matter. After
said date, the application(s) and/or declaration(s), as filed or as
amended, may be granted and/or permitted to become effective.
Transok, Inc., et al. (70-8519)
Transok, Inc. ("Transok"), Transok Acquisition Company ("TAC"),
Transok Gas Transmission Company ("Transmission") and Transok Gas Gathering
Company ("Gathering") (collectively, the "Applicant Companies"), P.O. Box
3008, Tulsa, Oklahoma 74101, have filed an application under Sections 9, 10
and 12 of the Act. Transok proposes to simplify its corporate and
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operating structure by merging its subsidiaries, TAC, Transmission and
Gathering, into Transok (the "Mergers"). The Applicant Companies state
that the Mergers would result in certain ad valorem tax, regulatory compliance
and managerial benefits and efficiencies. In addition, they would simplify the
corporate structure of Transok by eliminating one of its first-tier subsidiaries
and two of its second-tier subsidiaries.
At present, Transok has two first-tier subsidiaries, TAC and
Transok Properties, Inc. ("Properties"). TAC has four subsidiaries,
Transmission, Gathering, Transok Gas Processing Company ("Processing") and
Transok Gas Company ("Marketing"). The Mergers would be accomplished by
(i) the merger of TAC into Transok, with Transok being the surviving
corporation, and (ii) the subsequent mergers of Transmission and Gathering
into Transok, with Transok being the surviving corporation. After the
completion of these mergers, Transok would have three first-tier
subsidiaries (Properties, Processing and Marketing) and no second-tier
subsidiaries. The Mergers would be accounted for in accordance with
generally accepted accounting principles and would not result in any change
in the consolidated financial statements of Transok.
Transok also proposes to transfer certain natural gas
compression assets from Transok to its wholly owned subsidiary, Transok Gas
Processing Company, as a capital contribution. Transok states that such
transfer would result in certain ad valorem tax savings.
