[Federal Register Volume 60, Number 241 (Friday, December 15, 1995)]
[Notices]
[Pages 64459-64461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30528]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26427]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
December 8, 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 January 2, 1996, to the Secretary, Securities and Exchange
Commission, Washington, DC 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 an 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.
The Southern Company (70-8733)
The Southern Company (``Southern''), 270 Peachtree Street, N.W.,
Atlanta, Georgia 30346, a registered holding company, and its
subsidiaries, Mobile Energy Services Holdings, Inc. (``Mobile
Energy''), Southern Electric International, Inc. (``Southern
Electric''), SEI Holdings, Inc. (``Holdings''), Southern Electric
Wholesale Generators, Inc. (``Domestic Holdings''), and SEI
[[Page 64460]]
Europe, Inc. (``Foreign Holdings''), each of 900 Ashwood Parkway,
Atlanta, Georgia 30338, have filed an application-declaration under
sections 6(a), 7, 9(a), 10, 12(b), 12(f), 13, 32 and 33 of the Act and
rules 43, 45, 53, and 54 thereunder.
Consolidation of Ownership of Exempt Projects
Southern proposes to consolidate all of its direct and indirect
ownership interests in all exempt wholesale generators (``EWGs'') and
foreign utility companies (``FUCOs'', and, together with EWGs, ``Exempt
Projects'') (each as defined in the Act), various intermediate
subsidiaries through which it holds investments in EWGs and FUCOs
(``Project Parents''), and activities and functions related to these
projects, under one of its subsidiaries, Holdings.\1\
\1\ The authorization of the transactions proposed in this file
would supercede Southern's current authorization to organize Project
Parents to hold investments in EWGs and FUCOs. Holding Co. Act
Release Nos. 26096 (Aug. 3, 1994) and 26338 (July 25, 1995)
(``Orders'').
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Pursuant to the Orders and preliminary to the proposed
reorganization, Southern organized and contributed to Holdings all of
the outstanding stock of Domestic Holdings, an EWG that holds
Southern's ownership interests in other domestic EWGs, and of Foreign
Holdings, a Project Parent that holds Southern's interest in a FUCO in
England. Southern will then contribute to Foreign Holdings its
interests in other existing FUCOs, foreign EWGs, and Project Parents.
In this proceeding, Southern proposes to take the following
additional steps to effect the proposed reorganization: (1) Southern
will contribute to Holdings the common stock of Southern Electric \2\,
and Southern Electric will become a subsidiary of Holdings; (2)
Southern Electric will sell to Foreign Holdings or its subsidiaries the
securities of Southern Electric International-Asia, Inc., and Southern
Electric international GmbH, two Southern electric subsidiaries that
conduct preliminary project development activities in foreign
countries\3\; (3) Southern Electric will transfer to Foreign Holdings
all of the common stock of SEI Operadora de Argentina S.A., a FUCO\4\;
and (4) Mobile Energy will create a new class of nonvoting preferred
stock and distribute all outstanding shares of such stock to Southern;
Southern will transfer such stock to Holdings, which, in turn, will
transfer such stock to Domestic Holdings, as a capital contribution.\5\
\2\ Southern Electric engages in preliminary project development
activities and the sale of operating, construction, project
management, administrative and other services to associates and
nonassociates, pursuant to Holding Co. Act Release No. 26212 (Dec.
30, 1994) (``December 1994 Order''). After the proposed
reorganization, Southern Electric would continue to engage in these
activities, and any additional investment in Southern Electric would
be made indirectly through Holdings.
\3\ The sales price for the shares will equal Southern
Electric's investment in the two companies, which currently is less
than $50,000 in the aggregate.
\4\ Southern Electric will distribute the stock of this
subsidiary to Holdings, and Holdings will concurrently transfer the
stock to Foreign Holdings
\5\ The purpose of these transactions is to direct some or all
of the cash flow and income from Mobile Energy to support the
operations and future financing by Holdings and Domestic Holdings.
Mobile Energy holds a 99% interest in Mobile Energy Services
Company, L.L.C., an Alabama limited liability company that owns a
cogeneration complex in Mobile.
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After the reorganization, Southern expects that future investments
in power projects will be made through Holdings and its subsidiaries,
and that Holdings and its subsidiaries will conduct all other related
project activities. Holdings will use available funds, including the
proceeds of financing by Southern and third-party borrowings that are
guaranteed by Southern\6\, together with internally generated funds and
proceeds of securities sold to third parties, to make these investments
and to finance the costs of other authorized and permitted activities.
\6\ The applicants state that Southern will make additional
investments in Holdings from time to time, to finance the business
of Holdings and its subsidiaries, pursuant to the exemptions in
rules 52 and 45(b)(4), provided that (a) any additional investment
in Holdings to enable Holdings to acquire directly or indirectly an
interest in an Exempt Project will be subject to the limitations of
rule 53 and any other applicable rules, and (b) the aggregate amount
of financing provided to Holdings by Southern that will be invested
directly or indirectly in energy-related companies will not exceed
$300 million or such greater amount as may be permitted under a rule
subsequently adopted by the Commission.
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Acquisition of Energy-Related Companies
Holdings also requests authority to acquire, directly or indirectly
through subsidiaries, in one or more transactions from time to time
through December 31, 2000, the securities of or other interests in one
or more companies that derive or will derive substantially all of their
revenues from the ownership and/or operation of one or more of the
following categories of energy-related businesses: (a) ``Qualifying
facilities'', as defined under the Public Utility Regulatory Policies
Act of 1978, as amended, and ownership and operation of incidental
facilities; (b) production, conversion and distribution of thermal
energy products; (c) brokering and marketing of energy commodities; and
(d) other energy-related businesses to the extent that acquisition of
interests in such businesses are exempt under a rule subsequently
adopted by the Commission.\7\
\7\ The Commission has proposed a rule that would exempt from
the requirement of prior Commission approval under the Act
acquisitions of securities of companies that derive all or
substantially all of their revenues from specified activities
closely related to the core utility business of a registered holding
company system. See Holding Co. Act Release No. 26313 (June 20,
1995), 60 FR 33642 (June 28, 1995).
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Formation of New Subsidiaries
Holdings, Domestic Holdings and Foreign Holdings propose to
organize one or more intermediate subsidiaries to make investments in
Exempt Projects, other power projects, and energy-related companies and
to provide project development and management services to projects and
companies held by them (``Intermediate Subsidiaries''), and to organize
one or more special purpose subsidiaries to engage in any of the
activities in which Southern Electric is currently authorized to engage
(``Special Purpose Subsidiaries'').\8\
\8\ The activities of such special purpose subsidiaries would be
subject to all terms, conditions and limitations in the December
1994 Order that are applicable to Southern Electric.
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Financial Guaranties
Southern has existing authorization with respect to guaranties of
subsidiary obligations.\9\ Southern now requests an order that would
supersede this guaranty authorization. Southern proposes to guaranty
the securities of Holdings or any of its direct or indirect
subsidiaries, from time to time through December 31, 2000, in an
aggregate principal amount at any one time outstanding of not more than
$1.2 billion, provided that the aggregate outstanding principal amount
of such guaranties, when added to Southern's ``aggregate investment'',
as defined in rule 53(a), in all Exempt Projects, shall not exceed 50%
of Southern's ``consolidated retained earnings,'' as so defined.\10\
\9\ Holding Co. Act Release No. 26349 (Aug. 3, 1995),
authorizing guaranties of the securities of Exempt Projects from
time to time through December 31, 1999, in an aggregate amount at
any one time outstanding not to exceed $1.2 billion, subject to
certain conditions and limitations.
\10\ In a separate proceeding in File No. 70-8725, Southern has
requested authorization to increase this limit to 100% of its
``consolidated retained earnings''. The issuance of an order in that
filing would amend Southern's guaranty authority as in effect at the
date of issuance of such order.
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Holdings, Domestic Holdings, Foreign Holdings and any Intermediate
Subsidiary also propose to guaranty the securities issued by any of
their direct or indirect subsidiaries (provided that the issue and sale
of such securities are
[[Page 64461]]
exempt from the requirement of prior Commission approval under section
6(a) of the Act), from time to time through December 31, 2000, in an
aggregate amount not to exceed $1.2 billion at any one time
outstanding.
Guaranties may take the form of direct guaranties, standby equity
funding commitments, obligations under capital maintenance agreements
or reimbursement agreements in respect of bank letters of credit, or
other similar financial instruments or undertakings.
Pledge of Securities
Southern proposes to pledge the shares of Holdings, and Holdings,
Domestic Holdings, Foreign Holdings and any Intermediate Subsidiary
propose to pledge the shares of their respective subsidiaries, as
security in connection with the sale of debt securities by Holdings and
such subsidiaries.
Performance Guaranties
Southern is currently authorized by the December 1994 Order to
guaranty performance by or act as indemnitor or surety with respect to
contractual obligations of Southern Electric, any subsidiary of
Southern Electric or any project entity in which Southern directly or
indirectly holds an interest, in an aggregate amount not to exceed $800
million at any one time outstanding through December 31, 2003 \11\.
Southern requests that this authorization be modified so that it may
provide such performance guaranties on behalf of Holdings and any
direct or indirect subsidiary of Holdings, including Southern Electric,
any Exempt Project, other power project, energy-related company or
Intermediate Subsidiary.
\11\ The aggregate amount of such guarantees and indemnification
of sureties is reduced by similar undertakings made or incurred by
Southern in connection with activities of certain other
subsidiaries.
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Holdings, Domestic Holdings, Foreign Holdings and any Intermediate
Subsidiary also propose to provide performance guaranties on behalf of
any of their direct and indirect subsidiaries. The amount of these
guaranties will be included in calculating the above maximum amount of
performance guaranties provided by Southern only if they are supported
by an agreement or undertaking of Southern.
Services and Goods
The applicants propose that Special Purpose Subsidiaries of
Holdings, Domestic Holdings or Foreign Holdings may render services or
sell goods to associate companies. Such services will be rendered and
goods will be sold at cost, in compliance with the Act and the rules
thereunder, unless the Special Purpose Subsidiary complies with the
conditions specified in the December 1994 Order with respect to
Southern Electric, in which case services or goods may be sold at
market prices.
Reporting
The applicants propose that a single consolidated quarterly report
be filed by Southern and Holdings pursuant to rule 24 with respect to
all activities of Holdings and its subsidiaries authorized in this
file. This report would replace the combined report currently being
filed pursuant to the December 1994 Order and the Orders with respect
to the activities of Southern Electric and the Project Parents.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-30528 Filed 12-14-95; 8:45 am]
BILLING CODE 8010-01-M
