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Retail Supplier With 300,000 Customers to Enter Transaction to Be Assumed by New Ownership
U.S. Gas & Electric, Inc. has sought FERC approval to enter into a reverse merger transaction under which new ownership will assume control of the company.
Specifically, under the transaction, U.S. Gas & Electric, Inc. would ultimately be directly owned by a new holding company, United States Gas & Electric Holdings, Inc.
The majority of United States Gas & Electric Holdings, Inc. would be owned by Lance T. Shaner (25.92%), Louis Beck, (25.92%), and Burt Bongard (0.26%). The remaining 47.9% of United States Gas & Electric Holdings, Inc. would be owned by the management of U.S. Gas & Electric, Inc.
U.S. Gas & Electric, Inc. is currently owned by various shareholders, with MVC Capital, Inc. holding 63%, U.S. Gas & Electric, Inc. management holding 18%, and others holding 19%.
As of July 2013, U.S. Gas & Electric, Inc. had grown to more than 285,000 customers, and expected to reach nearly 330,000 customers by the end of 2013.
More specifically, U.S. Gas & Electric, Inc. (USG&E), and its subsidiaries Energy Services Providers, Inc. (ESPI), Massachusetts Gas & Electric, Inc. (MG&E), and Connecticut Gas & Electric, Inc. (CTG&E) sought FERC approval for a sale of 100% of the equity interests in USG&E to United States Gas & Electric Holdings, Inc. (Buyer), a corporation currently owned by Lance T. Shaner, Louis Beck and Burt Bongard.
United States Gas & Electric Holdings, Inc. was created for the purposes of acquiring USG&E per the transaction. United States Gas & Electric Holdings, Inc. has no physical assets, is not currently involved in any business activities, and is not a public utility under the Federal Power Act. United States Gas & Electric Holdings, Inc. wholly owns its only subsidiary L&L Enterprises (L&L), which has no physical assets and was created as a merger vehicle for the transaction. L&L is not currently involved in any business activities and is not a public utility under the FPA.
Aside from the interests in United States Gas & Electric Holdings, Inc., neither Mr. Shaner nor Mr. Beck is employed by a public utility or is an officer or director of a public utility. Mr. Shaner owns less than a 10% interest in Rex Energy Corp., a Delaware corporation engaged in the acquisition, production, exploration and development of oil, natural gas, and natural gas liquids.
The transaction would involve a reverse merger whereby L&L would merge into USG&E, the wholly-owned subsidiary of United States Gas & Electric Holdings, Inc. USG&E would survive the merger. The transaction would involve the "roll-over" of approximately 37% of USG&E's currently outstanding equity into an equity interest in United States Gas & Electric Holdings, Inc. of approximately 47.9% held by individual management personnel of the USG&E. The remaining 52.1% equity interest of United States Gas & Electric Holdings, Inc. would be owned by the three current owners. Mr. Shaner would own 25.92%, Mr. Beck would own 25.92%, and Mr. Bongard would own 0.26% of United States Gas & Electric Holdings, Inc.
Upon completion of the transaction, all of the equity interests in USG&E would be owned by United States Gas & Electric Holdings, Inc.
After the transaction, Doug Marcille would become the CEO and President of United States Gas & Electric Holdings, Inc., and continue to be CEO and President of USG&E Inc., ESPI, MG&E and CTG&E. Additionally, Mr. Marcille would become a director of United States Gas & Electric Holdings, Inc., and continue to be a director of USG&E, ESPI, MG&E and CTG&E.
USG&E and United States Gas & Electric Holdings, Inc. told FERC that they, "need to consummate the Transaction as soon as possible and therefore respectfully request expedited action on this Application."
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September 17, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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