(As filed with the Securities and Exchange Commission March 21, 2002)
File No. 70-9551
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POS AMC
(Post Effective Amendment No. 1)
on
FORM U-1
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410-6272
IWC Resources Corporation
Indianapolis Water Company
Harbour Water Company
Liberty Water Corporation
Irishman's Run Acquisition Corp.
The Darlington Water Works Company
IWC Morgan Water Corporation
White River Environmental Partnership
1220 Waterway Boulevard
Indianapolis, Indiana 46202
(Names of companies filing this statement and
addresses of principal executive offices)
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NiSource Inc.
(Name of top registered holding company parent of each applicant or declarant)
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Jeffrey W. Grossman,
Vice President and Controller
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410-6272
(Name and address of agent for service)
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The Commission is requested to
mail copies of all orders,
notices and other
communications to:
Peter V. Fazio, Jr., Esq. William T. Baker, Jr., Esq.
Schiff Hardin & Waite Thelen Reid & Priest LLP
6600 Sears Tower 40 West 57th Street
Chicago, Illinois 60606-6473 New York, New York 10019
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The record in this proceeding is hereby supplemented as follows:
1. ITEM 1 - DESCRIPTION OF PROPOSED TRANSACTION, is supplemented
as follows:
A. Summary of Prior Proceedings.
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By order dated October 30, 2000 in this proceeding (Holding Co. Act
Release No. 27263) (the "Merger Order"), the Commission authorized NiSource Inc.
(formerly New NiSource Inc.) ("NiSource"), a Delaware corporation, to acquire
all of the issued and outstanding common stock of NiSource Inc., an Indiana
corporation ("NiSource Indiana") and Columbia Energy Group ("Columbia") through
mergers of wholly-owned subsidiaries of NiSource into NiSource Indiana and
Columbia, followed immediately by the merger of NiSource Indiana into NiSource.
These transactions were consummated on November 1, 2000, and NiSource registered
with the Commission as a holding company pursuant to Section 5 of the Public
Utility Holding Company Act of 1935, as amended (the "Act"), on the same day.
NiSource directly or indirectly owns all of the issued and outstanding
common stock of ten public-utility subsidiaries (referred to collectively as the
"Utility Subsidiaries"), as follows: Northern Indiana Public Service Company,
Kokomo Gas and Fuel Company, Northern Indiana Fuel and Light Company, Inc. and
Bay State Gas Company, which are owned directly by NiSource; Northern Utilities,
Inc., which is a subsidiary of Bay State; and Columbia Gas of Kentucky, Inc.,
Columbia Gas of Maryland, Inc., Columbia Gas of Ohio, Inc., Columbia Gas of
Pennsylvania, Inc. and Columbia Gas of Virginia, Inc., which are direct
subsidiaries of Columbia. Together, the Utility Subsidiaries distribute gas at
retail in portions of Indiana, Ohio, Virginia, Maryland, Kentucky, Pennsylvania,
Massachusetts, New Hampshire and Maine. In addition, Northern Indiana generates,
transmits and sells electricity in a portion of northern Indiana.
IWC Resources Corporation ("IWCR"), an Indiana corporation, is a
direct wholly-owned non-utility subsidiary of NiSource. IWCR is a holding
company that, through subsidiaries, engages in the business of storing,
supplying, distributing and selling water to the public in certain areas of
central Indiana and in providing ancillary services to water utilities. IWCR
directly owns all of the outstanding common stock of Indianapolis Water Company
("Indianapolis Water"), Harbour Water Company, Liberty Water Corporation,
Irishman's Run Acquisition Corp., The Darlington Water Works Company, and IWC
Morgan Water Corporation; and indirectly through Indianapolis Water owns a 52%
partnership interest in White River Environmental Partnership ("WREP"), which
operates a wastewater treatment facility.(1) IWCR and the subsidiaries named
above are referred to collectively as the "Water Utilities."
Under the terms of the Merger Order, the Commission determined that
the business of IWCR and its subsidiaries is not retainable under the standards
of Section 11(b)(1) of the Act. The Commission directed NiSource, within three
(1) IWCR also directly owns all of the outstanding common stock of a seventh
subsidiary company, Lawrence Water Company, Inc., which previously had an
operating agreement with the City of Lawrence, Indiana. This subsidiary is now
inactive and will remain inactive.
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years of the date of the Merger Order, to (1) divest the stock or assets of IWCR
for cash, or (2) cause the Water Utilities to take appropriate action to sell
their assets (net of associated liabilities) for cash, or (3) consummate the
divestiture through some combination of the transactions described in (1) and
(2). The Commission held that the disposition of these interests is "necessary
and appropriate to integrate and simplify the [NiSource] holding company system
.. . . and to effectuate the provisions of section 11(b)(1) of the Act." The
Commission further directed that the proceeds of the disposition of the stock
and/or assets described above (the company selling such stock or assets being
referred to as the "Transferor") be contributed to the capital of NiSource
Finance Corp. ("NiSource Finance"), a financing subsidiary of NiSource, by
NiSource or other Transferor within 90 days of the receipt thereof, and that
such capital contributions are "necessary and appropriate to integrate and
simplify the holding [company] capital structure."
B. Subsequent Actions.
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NiSource, IWCR and the Consolidated City of Indianapolis, Marion
County, Indiana, an Indiana municipal corporation (the "Buyer") have entered
into an Asset Purchase Agreement, dated as of November 26, 2001, pursuant to
which Buyer has agreed to purchase substantially all of the assets, properties
and rights of the Water Utilities (except for the partnership interest in WREP)
for a purchase price (the "Purchase Price") equal to (i) cash consideration of
$380 million, plus the cost (estimated at $2.5 million) to redeem certain
preferred stock issued by IWCR, and (ii) the assumption by Buyer of indebtedness
and other liabilities and obligations of IWCR and the Water Utilities, currently
estimated at approximately $200 million. For federal income tax purposes, the
transaction will be treated as a sale of the assets of the Water Utilities for
an amount equal to the Purchase Price. In accordance with the Merger Order, the
proceeds of the sale (currently estimated at approximately $580 million) will be
contributed to the capital of NiSource Finance in consideration for preferred
stock of NiSource Finance. In addition, Indianapolis Water has agreed to sell
its partnership interest in WREP to LAH White Power Corporation and JMM White
Power Corporation for $8 million (the "WREP Purchase Prise"). In accordance with
the Merger Order, an amount equal to the WREP Purchase Price will be contributed
to the capital of NiSource Finance in consideration for preferred stock of
NiSource Finance.(2) NiSource Finance will use the proceeds invested in its
preferred stock to retire debt.
C. Further Relief Requested.
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Section 1081(b)(2) of the Code provides that if any property received
in exchange for property that is ordered to be divested is "nonexempt
property,"(3) gain shall be recognized unless, in accordance with an order of
the Commission, such nonexempt property is expended for property other than
nonexempt property or is invested as a contribution to the capital, or as
paid-in surplus, of another corporation, and such order recites that such
expenditure or investment is "necessary or appropriate to the integration or
(2) Following the completion of these transactions, IWCR will continue to own
all of the common stock of the other Water Utilities, which, in turn, will hold
the preferred stock of NiSource Finance acquired with the proceeds of the two
sales. The Water Utilities will not engage in any active business operations.
(3) The term "non-exempt property" is defined in Section 1083(e) of the Code to
include, among other things, cash and indebtedness of the transferor that is
cancelled or assumed by the purchaser in the exchange.
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simplification of the holding company system of which the transferor corporation
is a member." In accordance with Section 1081(f) of the Code, NiSource requests
that the Commission issue a further order in this proceeding confirming that (1)
the proposed sale of the property and assets of the Water Utilities (including
the partnership interest in WREP), as described above, will be a disposition in
compliance with the Merger Order, (2) the investment of proceeds equal to the
Purchase Price and the WREP Purchase Price as a contribution to the capital of
NiSource Finance is in compliance with the Merger Order, and (3) accordingly,
each of the foregoing is necessary or appropriate to the integration or
simplification of the NiSource holding company system and will effectuate the
provisions of Section 11(b)(1) of the Act.
2. ITEM 2 - FEES, COMMISSIONS AND EXPENSES is supplemented as follows:
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The additional fees, commissions or expenses have been incurred in
connection with filing this Post-Effective Amendment will not exceed $10,000.
3. ITEM 5 - PROCEDURE is supplemented as follows:
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NiSource requests that the Commission issue its supplemental order in
this proceeding as soon as its rules allow. NiSource expects that the sale of
the WREP partnership interest will occur by March 31, 2002, and that the sale of
the remaining assets of the Water Utilities will occur by April 30, 2002.
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned companies has duly caused this Post-Effective
Amendment to be signed on its behalf by the undersigned thereunto duly
authorized.
NiSOURCE INC.
By: /s/ Jeffrey W. Grossman
Name: Jeffrey W. Grossman
Title: Vice President and Controller
IWC RESOURCES CORPORATION
INDIANAPOLIS WATER COMPANY
HARBOUR WATER COMPANY
LIBERTY WATER CORPORATION
IRISHMAN'S RUN ACQUISITION CORP.
THE DARLINGTON WATER WORKS COMPANY
IWC MORGAN WATER CORPORATION
By: /s/ John M. Davis
Name: John M. Davis
Title: Corporate Secretary
White River Environmental Partnership,
by Indianapolis Water Company,
its general partner,
By: /s/ John M. Davis
Name: John M. Davis
Title: Corporate Secretary
Date: March 21, 2002
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