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Details Emerge on Glacial Energy Acquisition
Details concerning the acquisition of various Glacial Energy retail suppliers by a company backed by private equity have emerged in a FERC application for approval of the transaction.
As exclusively reported by EnergyChoiceMatters.com last week, the Glacial Energy retail energy suppliers will be acquired by Voltage Energy Holdings Inc., a private equity-backed company.
Specifically, as described in the FERC application, Glacial Energy Holdings ("Glacial Holdings"), the owner of all outstanding shares of Glacial Energy of Illinois, Inc. ("Glacial IL"), Glacial Energy of New York ("Glacial NY"), Glacial Energy of New England, Inc. ("Glacial NE"), Glacial Energy of New Jersey, Inc. ("Glacial NJ"), and Glacial Energy of California, Inc. ("Glacial CA" and, collectively the "Glacial Sellers"), together with Voltage Energy Holdings, Inc. ("Voltage") (collectively with Glacial Holdings and Glacial Sellers, the "Applicants") request authorization to: (1) transfer ownership and control over the Glacial Sellers from Glacial Holdings to Voltage; and (2) transfer certain interests in Glacial Holdings from Hasbro Management LLC ("Hasbro") and Photon Management LLC ("Photon") to Gary Mole, Glacial Holdings' 80 percent shareholder (the "Proposed Transaction")
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ADVERTISEMENT Under the Stock Purchase Agreement among Glacial Holdings, Glacial Energy VI, LLC, Gary Mole and Voltage (the "Stock Purchase Agreement" or "SPA"), Voltage will acquire all of the issued and outstanding shares of capital stock of the Glacial Sellers from Glacial Holdings, thereby transferring ownership and control over the Glacial Sellers to Voltage. The Stock Purchase Agreement further provides that Glacial Holdings will transfer to Voltage all of the issued and outstanding capital stock of non-jurisdictional retail electricity sellers Glacial Energy Washington DC, Inc., Glacial Energy Maryland, Inc., Glacial Energy Michigan, Inc., Glacial Energy Ohio, Inc., Glacial Energy Pennsylvania, Inc., Glacial Energy Texas, and Glacial Energy Inc., the holder of a Virginia retail electric license (collectively, the "Glacial Non-jurisdictional Sellers" and together with Glacial Holdings and Glacial Sellers, the "Glacial Entities"). In addition, all issued and outstanding shares of Glacial Natural Gas, Inc., which holds licenses to sell natural gas at retail in various jurisdictions, will be transferred by Glacial Holdings to Voltage. Finally, the Stock Purchase Agreement also requires that Voltage cause each of Photon and Hasbro to assign and transfer its shares of capital stock and warrants in Glacial Holdings to Gary Mole.
In short, as a result of the Proposed Transaction, the Glacial retail suppliers will become direct, wholly-owned subsidiaries of Voltage, and Glacial Holdings will be wholly-owned by Gary Mole.
Although the chart is not specifically labeled, what appears to be a post-transaction ownership chart suggests that after the transaction, Glacial Holdings will continue to own Negawatt Business Solutions and associated Negawatt businesses.
Currently, the outstanding voting securities of Glacial Holdings are eleven percent owned by Hasbro, eighty percent owned by an individual, Gary Mole, and nine percent owned by Photon. Hasbro is ninety-nine percent owned by Cobblestone Holdings, LLC and one percent owned by another individual.
Voltage is a Delaware corporation whose primary business activity will be to acquire all of the issued and outstanding shares of capital stock of the Glacial Sellers pursuant to the Proposed Transaction. Voltage does not, directly or indirectly, own, operate or control electric generation facilities, transmission facilities, natural gas storage or distribution facilities or any other inputs to electric power production. Voltage's outstanding equity is owned 55 percent by Voltage Energy Holdings VA ("VEH VA") and 45 percent by Voltage Energy Holdings CO ("VEH CO" and together with VEH VA, the "Voltage Owners"). Neither Voltage Owner, directly or indirectly, owns, operates or controls electric generation facilities, transmission facilities, natural gas storage or distribution facilities or any other inputs to electric power production. Each Voltage Owner, per its respective Operating Agreement, is controlled exclusively by its managers and, hence, the owners of the Voltage Owners (the "Upstream Owners") are passive. In particular, the individuals, Naftali Manela, Joseph SanFilippo and Samuel Salfati are the managers ("VEH Managers") of both VEH VA and VEH CO. Under Section X.X of the VEH VA Operating Agreement and the VEH CO Operating Agreement (together, the "VEH OAs"), the VEH Managers have the exclusive right and power to manage the business of each of the Voltage Owners, including appointing officers. Section X.X of each VEH OA describes the limited right of the Upstream Owners to remove a VEH Manager (only in the case of "fraud, willful misappropriation of funds, gross negligence, willful misconduct, or willful violation of a material provision of the respective VEH OA").
Except as noted in the next paragraph, none of the VEH Managers owns, operates, or controls, either directly or indirectly, through a position as an officer or director of any entity, or otherwise, any electric generation facilities, transmission facilities, natural gas storage or distribution facilities or any other inputs to electric power production
Joseph SanFilippo is presently the sole manager of Hasbro and, pursuant to the OA of Hasbro, he has the right to control Hasbro. Accordingly, Mr. SanFilippo controls Hasbro's 11 percent interest in Glacial Holdings. Upon the consummation of the Proposed Transaction, Hasbro's 11 percent equity interest in Glacial Holdings will be transferred to Mr. Mole and Mr. SanFilippo will cease to control an 11 percent equity interest in Glacial Holdings
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December 20, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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