File No. 70-8519
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4 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) 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 non-utility 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. 4 to the Form U-1
Application-Declaration in 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 and
re-filing all Exhibits, 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.
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
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.
Transok currently has two first-tier subsidiaries, TAC and Transok
Properties, Inc. ("Properties"), 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). Transok currently has four-second-tier
subsidiaries, Transmission, Gathering, Processing and Marketing. After the
Mergers, Transok would have no second-tier subsidiaries and three first-tier
subsidiaries, Processing, Marketing and Properties. 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. The
first merger would result in all subsidiaries of Transok being first-tier
subsidiaries, by operation of law and without action on the part of any such
subsidiaries. Those subsidiaries would be Transmission, Gathering,
Processing, Marketing and Properties. The second merger would result in the
elimination of Transmission and Gathering as subsidiaries. As a result of the
Mergers, Transok would acquire all of the assets and assume all of the
liabilities of TAC, Transmission and Gathering. Each outstanding share of
capital stock of Transok would remain unchanged, with the same rights,
privileges and preferences as before the Mergers. Each outstanding share of
TAC, Transmission and Gathering would be cancelled and extinguished. 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
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
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 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.
Exhibit 4 - Balance Sheet as of September 30, 1994, and
Statement of Income for the 12 months ended
September 30, 1994, of Transok and consolidated
subsidiaries (to be filed by amendment).
Exhibit 5 - Current Corporate Structure of Transok, Inc.
System Companies.
Exhibit 6 - Proposed Corporate Structure of Transok, Inc.
System Companies.
Exhibit 7 - Agreement and Plan of Liquidation and Merger.
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.<PAGE>
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: October 20, 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
<PAGE>
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
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 September 30, 1994, and
Statement of Income for the 12 months ended
September 30, 1994, of Transok and consolidated
subsidiaries (to be filed by amendment). --
5 Current Corporate Structure of Transok, Inc.
System Companies. Electronic
6 Proposed Corporate Structure of Transok, Inc.
System Companies. Electronic
7 Agreement and Plan of Liquidation and Merger. Electronic
EXHIBIT 1
---------
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
October 20, 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.
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
GWG/RBW<PAGE>
EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Company Act of 1935 ("Act")
October __, 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 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.<PAGE>
EXHIBIT
5
CURRENT CORPORATE STRUCTURE
TRANSOK, INC. System Companies
TRANSOK, INC.
Transok Properties, Inc.
Transok Acquisition Company
Transok Gas Transmission Company
Transok Gas Company
Transok Gas Processing Company
Transok Gas Gathering Company
<PAGE>
EXHIBIT 6
PROPOSED CORPORATE STRUCTURE
TRANSOK, INC. System Companies
TRANSOK, INC.
Transok Properties, Inc.
Transok Gas Processing Company
Transok Gas Company<PAGE>
