SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 6, 1999
Cinergy Corp.
(Exact name of registrant as specified in its charter)
Delaware 1-11377 31-1385023
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
139 East Fourth Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 421-9500
ITEM 5. OTHER EVENTS.
Reference is made to the joint press release of Cinergy Corp. and GPU Inc.,
dated July 6, 1999, announcing an agreement on the purchase and sale of Cinergy
Corp.'s interest in Midlands Electricity plc (Midlands) in the United Kingdom to
GPU Inc., a copy of which is attached hereto as Exhibit 20-a and is incorporated
by reference herein. Reference is also made to Cinergy Corp.'s press release
dated July 6, 1999, setting forth its projected financial impact from the
Midlands sale, a copy of which is attached hereto as Exhibit 20-b and is
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) The following exhibits are filed herewith:
Exhibit
Designation Nature of Exhibit
20-a Joint press release of Cinergy Corp. and
GPU Inc., dated July 6, 1999.
20-b Press release of Cinergy Corp., dated
July 6, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cinergy Corp.
--------------------------------
(Registrant)
Date: July 6, 1999 By: /s/ Bernard F. Roberts
--------------------------------
Bernard F. Roberts
Vice President and Comptroller
(Signature)
EXHIBIT 20-a
FOR GPU:
News Contact: Jeff Dennard 973-455-8333
Investor Contact: Joanne Barbieri 973-455-8720
FOR CINERGY:
News Contact: Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Investor Contact: Steve Schrader 513-287-1083
FOR IMMEDIATE RELEASE - July 6, 1999
GPU TO ACQUIRE CINERGY'S INTEREST IN MIDLANDS
MORRISTOWN, NJ and CINCINNATI, OH--GPU Inc. and Cinergy Global Resources Inc., a
subsidiary of Cinergy Corp., have reached an agreement on the purchase and sale
of Cinergy's interest in Midlands Electricity plc in the United Kingdom to GPU
Inc., the companies announced today. The transaction will make Midlands
Electricity a wholly owned subsidiary of GPU Inc. The purchase is expected to be
complete by mid-July.
Cinergy and GPU jointly acquired the British regional electric company in 1996
through Avon Energy Partners plc. Under the agreement, GPU will acquire
Cinergy's 50 percent equity interest for approximately $700 million in cash and
will retain Midlands' distribution and contracting businesses as well as its
ownership in 1,150 megawatts of independent power plants worldwide. The gas
trading operation headquartered in London will remain with Cinergy. Cinergy's
international energy project development subsidiary, Cinergy Global Power
Services Ltd., will continue to have a strong presence in the U.K. and operate
from bases in Stratford-upon-Avon and London. Cinergy Global Power's current
portfolio of international power investments and those under development is
unaffected by this transaction.
(more)
Page 2. GPU to acquire Cinergy's interest
"The full ownership of Midlands will provide GPU a base for expansion in the
U.K. and Europe, something very important as we continue to implement our
strategy of geographic and horizontal growth," said GPU Chairman, President and
Chief Executive Officer Fred D. Hafer. "We see this transaction as a significant
step in growing our business as a premier global utility services company."
Said Cinergy President and Chief Executive Officer James E. Rogers, "We've had a
good partnership with GPU during which Midlands has improved its productivity
and served its customers well. This is a move that aligns corporate assets with
corporate strategy. It gives Cinergy the opportunity to capture the value we
have achieved through our Midlands investment and pursue a strategy of
nonregulated domestic and international energy growth initiatives. We also will
continue to have two key growth platforms in the U.K.--international energy
project development and gas trading."
Since Cinergy and GPU acquired Midlands, the U.K. has completed its transition
to a fully competitive energy market and Midlands has made the strategic move to
separate its regulated, distribution business--which transfers electricity
across its wires to consumers--from its competitive supply operation--which
purchases and markets electricity from generators for resale to consumers. In a
transaction announced in 1998 and finalized last week, Midlands sold its supply
business to National Power plc and retained the regulated distribution lines and
substations.
"The operation of Midlands and its expertise in competitive contract and meter
reading services will allow us to compete aggressively for these and additional
utility services in the U.K. and Europe," said Bruce Levy, GPU's chief financial
officer and executive in charge of international utility holdings. "Midlands
will provide a source of continued earnings and a platform for growth of our
utility services business."
(more)
Page 3. GPU to acquire Cinergy's interest
"This has been a successful, strategic investment for Cinergy," said Cheryl
Foley, president of Cinergy Global Resources. "Along with financial gains,
ownership of Midlands has helped us establish a base for international growth.
From this investment we formed Cinergy Global Power, an experienced
international development team with a portfolio of power generation,
transmission and distribution assets worldwide."
Headquartered in Worcester, England, Midlands Electricity is one of 12 regional
electricity companies in England and Wales. The company distributes electricity
to 2.2 million customers in a 5,000-square-mile franchise service area that
includes Birmingham, the U.K.'s second largest city. Midlands owns and operates
approximately 40,000 miles of overhead and underground circuit.
GPU Inc. (NYSE:GPU), headquartered in Morristown, N.J., is a registered utility
holding company providing utility and utility-related services to customers
throughout the world. GPU's electric and gas utility companies--GPU Energy,
Midlands Electricity, GPU PowerNet, GPU GasNet and Emdersa--serve nearly 6
million customers in the United States, the U.K., Australia and Argentina. The
company's IPP units own and operate 22 projects in seven countries and the
United States. GPU's 1998 revenues were $4.3 billion, and its total assets were
$16.3 billion. GPU's other subsidiaries include: GPU Advanced Resources Inc.,
GPU Generation Inc., GPU Nuclear Inc., GPU Service Inc. and GPU Telcom Services
Inc.
Cinergy (NYSE:CIN) is one of the United States' leading diversified energy
companies. Its operating companies, The Cincinnati Gas & Electric Company and
PSI Energy Inc., serve more than 1.4 million electric customers and 471,000 gas
customers in Ohio, Indiana and Kentucky. Cinergy Global Resources is the
company's international business unit created in 1998 for Cinergy's
international investments and domestic initiatives in renewable generation. The
company has assets in power generation, transmission and distribution projects
in the Czech Republic, Spain, the United Kingdom, Zambia, Bangladesh, Estonia,
and the United States.
EXHIBIT 20-b
News Contact: Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Investor Contact: Steve Schrader 513-287-1083
Web Site: www.cinergy.com
FOR IMMEDIATE RELEASE - July 6, 1999
CINERGY PROJECTS FINANCIAL IMPACT FROM MIDLANDS SALE
CINCINNATI -- Cinergy Corp. expects to realize a gain of approximately $.50
cents per share in the third quarter from the company's sale of Midlands
Electricity plc to GPU Inc. After deducting financing, transaction and currency
costs, the net contribution to earnings will be approximately $.43 cents per
share.
Cinergy and GPU announced an agreement today for Cinergy to sell its 50 percent
interest in Midlands for approximately $700 million, a net cash transaction of
approximately $600 million after income taxes. Including Cinergy's share of
liabilities assumed by GPU, the transaction is valued at approximately $1.55
billion. The purchase is expected to be complete by mid-July.
Under the agreement Cinergy will be retaining Midlands' gas trading operation
headquartered in London. Cinergy's international energy project development
subsidiary, Cinergy Global Power Services Ltd., also will continue to have a
strong presence in the United Kingdom from bases in Stratford-upon-Avon and
London. Cinergy Global Power's current portfolio of international energy
investments is unaffected by this transaction. (more)
Page 2. Cinergy projects financial impact
Cinergy plans to reinvest its earnings in growth initiatives in the United
States and abroad as well as to reduce existing corporate debt.
"This has been a successful investment for us," said James E. Rogers, Cinergy
president and chief executive officer. "As Midlands makes a strategic move to
focus on its regulated operations, we're gaining flexibility to pursue growth in
new investments domestically and internationally. We also are maintaining two
promising growth platforms in the U.K.--international energy project development
and gas trading."
Cinergy and GPU jointly acquired the British regional electric company in 1996
through Avon Energy Partners plc in a transaction valued at approximately $2.7
billion. Cinergy's equity investment at that time was $500 million. In
anticipation of a fully competitive U.K. electricity market, Midlands initiated
the sale of the competitive supply part of its operation to National Power in
1998. Midlands retained the regulated distribution lines and substations in the
transaction that was completed last week.
Cinergy (NYSE:CIN) is one of the United States' leading diversified energy
companies. Its operating companies, The Cincinnati Gas & Electric Company and
PSI Energy Inc., serve more than 1.4 million electric customers and 471,000 gas
customers in Ohio, Indiana and Kentucky.
Cinergy's 1998 revenues were $5.9 billion, and its total assets are $10.3
billion. Cinergy's energy system comprises approximately 11,000 megawatts at 14
baseload stations and seven peaking stations. Its natural gas distribution
system is connected to six interstate pipelines.