FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 8, 1996
MAINE PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Maine 1-3429 01-0113635
(State, or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
209 State Street, Presque Isle, Maine 04769
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 207-768-5811
Current Report, Form 8-K for Date of Report:
Maine Public Service Company March 8, 1996
Item 4. Change in the Company's Certifying Accountant
For many years, including fiscal year 1995, the firm of Deloitte &
Touche, LLP, (Deloitte & Touche) independent public accountants, was
engaged by the Company as the principal independent accountant to audit
the Company's financial statements. On March 1, 1996, the Company's
entire Board of Directors, based on a recommendation of the Audit
Committee of the Board, voted to engage the firm of Coopers & Lybrand,
LLP, (Coopers & Lybrand) independent public accountants, as the
Company's principal accountant beginning with the 1996 fiscal year audit
and not to use the services of Deloitte & Touche. This change in
accountants followed the Company's issuance, in November 1995, of a
request for proposal to six major independent accounting firms to audit
the Company's financial statements. The Company issued this request
solely to determine whether it could reduce the fees it pays for
accounting services. Three firms, including Deloitte & Touche and
Coopers and Lybrand, responded to the request. Based solely upon the
Audit Committee's review of those responses, and the terms of the
request, the Board determined to engage Coopers & Lybrand, whose bid was
substantially lower than any other received by the Company, as the
Company's principal accountant for a term of at least three years,
beginning in fiscal year 1996. As a result of this vote, the Company
informed Deloitte & Touche that it would not renew its year to year
engagement letter with that firm.
Deloitte & Touche's report on the Company's financial statements
for either fiscal years 1993 or 1994 did not contain an adverse opinion
or disclaimer of opinion or any modification or qualification, except
for the adoption in 1993 of SFAS 109 and SFAS 106. Deloitte & Touche's
auditors' report on the Company's financial statements for the 1995
fiscal year, is expected to be issued within the next 30 days.
At no time during the Company's two most recent fiscal years or any
time thereafter has there been any disagreement between the Company and
the firm of Deloitte & Touche on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure. At no time during the Company's two most recent fiscal years
or any time thereafter did any event occur between the Company and
Deloitte & Touche that would require further reporting in this Form 8-K.
At no time during the Company's two most recent fiscal years and
any time thereafter prior to the Company's engaging Coopers & Lybrand
did the Company consult Coopers & Lybrand regarding either the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements.
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Current Report, Form 8-K for Date of Report:
Maine Public Service Company March 8, 1996
Item 5. Other Material Events
Series 1991 Tax-Exempt Bonds to be Redeemed
On April 4, 1991, the Maine Public Utilities Financing Bank (MPUFB)
issued $10 million of tax-exempt bonds on behalf of the Company.
Pursuant to the long-term note issued under a loan agreement between the
Company and the MPUFB, the Company agreed to make payments to the MPUFB
for the principal and interest on the bonds. Concurrently, pursuant to
a letter of credit and reimbursement agreement, the Company caused a
Direct Pay Letter of Credit for a term of five years to be issued by
Barclays Bank PLC, New York Branch (Barclays Bank) for the benefit of
the holders of such bonds. To secure the Company's obligations under
the reimbursement agreement, the Company issued a second mortgage bond
to Barclays Bank in the amount of $10,426,563, as collateral for the
Company's obligation to repay Barclays Bank the $10 million principal
amount of the bonds plus 195 days of interest on the bonds. The bonds
have a coupon rate of 7.875% and, after considering the enhancement fees
and other costs, the annual cost to the Company approximates 8.725%.
Barclays Bank notified the Company that it would not renew the
Direct Pay Letter of Credit for this issue. With the expiration of the
Direct Pay Letter of Credit on April 4, 1996, the entire $10 million
principal amount of the bonds will be redeemed at par on April 1, 1996
in accordance with the indenture. The Company is now seeking the
necessary funds and other arrangements (including bridge loans) to meet
its reimbursement obligation that will result from the draw on the
Letter of Credit prior to its expiration, with the funds used to redeem
the bonds. The Company is considering the refunding of this issue as a
means of meeting its reimbursement obligation.
MAINE PUBLIC SERVICE COMPANY
Registrant
Dated: March 8, 1996 Larry E. LaPlante
Larry E. LaPlante, Vice President
Finance and Treasurer
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