[Federal Register Volume 62, Number 216 (Friday, November 7, 1997)]
[Notices]
[Pages 60288-60293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29418]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26769]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

October 31, 1997.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated thereunder. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendments thereto is/are available for public 
inspection through the Commission's Office or Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by November 24, 1997, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in case of an attorney at law, by 
certificate) should be filed with the request. Any request for hearing 
shall identify specifically the issues of fact or law that are 
disputed. A person who so requests will be notified of any hearing, if 
ordered, and will receive a copy of any notice or order issued in the 
matter. After said date, the application(s) and/or declaration(s), as 
filed or as amended, may be granted and/or permitted to become 
effective.

The Southern Company, et al. (70-9137); Notice of Proposal To Amend 
Articles of Incorporation and Authorize Registered Holding Company To 
Acquire Preferred Stock of Utility Subsidiaries; Order Authorizing 
Solicitation of Proxies

    The Southern Company (``Southern''), 270 Peachtree Street, N.W., 
Atlanta, Georgia 30303, a registered holding company, and certain of 
its public-utility subsidiaries, Alabama Power Company (``Alabama''), 
600 North 18th Street, Birmingham, Alabama 35291, Georgia Power Company 
(``Georgia''), 333 Piedmont Avenue, N.E., Atlanta, Georgia 30308, Gulf 
Power Company (``Gulf''), 500 Bayfront Parkway, Pensacola, Florida 
32501, and Mississippi Power Company (``Mississippi''), 2992 West 
Beach, Gulfport, Mississippi 39501 (Alabama, Georgia, Gulf and 
Mississippi collectively, ``Subsidiaries''), have filed an application-
declaration under sections 6(a), 7, 9(a), 10, 12(c), 12(d) and 12(e) of 
the Act, and rules 43, 44, 51, 54, 62 and 65 thereunder.

Alabama

    Alabama has outstanding 5,608,955 shares of common stock, par value 
$40 per share (``Alabama Common Stock''), all of which are held by 
Southern. Alabama's outstanding preferred stock consists of: (1) 5.52 
million shares of Class A cumulative preferred stock, stated capital 
$25 per share, issued in three series,\1\ which are traded on the New 
York Stock Exchange (``Alabama NYSE Preferred Stock''); (2) 704,000 
shares of cumulative preferred stock, par value $100 per share, issued 
in six series,\2\ which are traded over-the-counter (``Alabama $100 
Preferred Stock''); (3) 200 shares of Class A cumulative preferred 
stock, stated capital $100,000 per share, which are traded over-the-
counter (``Alabama 1993 Auction Preferred Stock''); and (4) 500,000 
shares of Class A cumulative preferred stock, stated capital $100, 
which are traded over-the-counter (``Alabama 1988 Auction Preferred 
Stock'' and, together with the Alabama NYSE Preferred Stock, Alabama 
$100 Preferred Stock and Alabama 1993 Auction Preferred Stock, 
``Alabama Preferred Stock''). Alabama has outstanding no other class of 
equity securities.
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    \1\ The three series of Alabama NYSE Preferred Stock consist of 
a 6.80% series, of which 1.52 million shares are outstanding 
(``6.80% Series''); a 6.40% series, of which two million shares are 
outstanding (``6.40% Series''); and an adjustable rate series, of 
which two million shares are outstanding (``AR Series'').
    \2\ The six series of Alabama $100 Preferred Stock consist of a 
4.20% series, of which 364,000 shares are outstanding (``4.20% 
Series''); a 4.52% series, of which 50,000 shares are outstanding 
(``4.52% Series''); a 4.60% series, of which 100,000 shares are 
outstanding (``4.60% Series''); a 4.64% series, of which 60,000 
shares are outstanding (``4.64% Series''); a 4.72% series, of which 
50,000 shares are outstanding (``4.72% Series''); and a 4.92% 
series, of which 80,000 shares are outstanding (``4.92% Series'').
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    Paragraph A.2.f.(2) of Article IX of Alabama's Charter (``Alabama 
Charter'') currently provides that, so long as any shares of Alabama's 
Preferred Stock are outstanding, without the affirmative vote of the 
holders of at least a majority

[[Page 60289]]

of the total voting power of the outstanding Alabama Preferred Stock, 
Alabama shall not issue or assume any securities representing unsecured 
debt (other than for the purpose of refunding or renewing outstanding 
unsecured securities issued by Alabama resulting in equal or longer 
maturities or redeeming or otherwise retiring all outstanding shares of 
the Alabama Preferred Stock or of any senior or equally ranking stock) 
if, immediately after the issue or assumption, the total outstanding 
principal amount of all securities representing unsecured debt of 
Alabama would exceed 20% of the aggregate of all existing secured debt 
of Alabama and the capital stock, premiums thereon and surplus of 
Alabama as stated on Alabama's books (``Alabama Debt Limitation 
Provision'').
    Paragraph A.2f.(1) of Article IX of the Alabama Charter currently 
provides that, so long as any shares of Alabama Preferred Stock are 
outstanding, without the affirmative vote of the holders of at least a 
majority of the total voting power of the outstanding Alabama Preferred 
Stock, Alabama shall not dispose of all or substantially all of its 
property or merge or consolidate, unless the action has been approved 
by the Commission (``Alabama Merger Provision'').
    Paragraph A.2.b. (except the first paragraph therein) of Article IX 
of the Alabama Charter currently provides that, so long as any shares 
of Alabama Preferred Stock are outstanding (except as may be approved 
or permitted by the affirmative vote of the holders of at least two-
thirds of the total voting power of the outstanding Alabama Preferred 
Stock), Alabama's payment of dividends on the Alabama Common Stock is 
limited to 50% of net income available for the stock during a period of 
12 months if, calculated on a corporate basis, the ratio of Alabama 
Common Stock equity to total capitalization, including surplus, 
adjusted to reflect the payment of the proposed dividend, is below 20% 
and to 75% of net income if the ratio is 20% or more but less than 25% 
(``Alabama Common Stock Dividend Provision'').
    The clause after the words ``January 31, 1942'' in the first 
paragraph of Paragraph A.2.b. of Article IX of the Alabama Charter 
currently provides that, so long as any shares of Alabama Preferred 
Stock are outstanding, Alabama shall not pay dividends on Alabama 
common Stock (except those paid concurrently with the receipt of a cash 
capital contribution in like amount) in cases where retained earnings 
are not at least equal to two times annual dividends on the outstanding 
Alabama Preferred Stock (``Alabama Retained Earnings Dividend 
Provision'' and, together with the Alabama Debt Limitation Provision, 
the Alabama Merger Provision and the Alabama Common Stock Dividend 
Provision, (``Alabama Restriction Provisions'').

Georgia

    Georgia has outstanding 7.7615 million shares of common stock, no 
par value (``Georgia Common Stock''), all of which are held by 
Southern. Georgia's outstanding preferred stock consists of: (1) 8.1565 
million shares of Class A cumulative preferred stock, stated value $25 
per share, issued in three series,\3\ which are traded on the New York 
Stock Exchange (``Georgia NYSE Preferred Stock''); and (2) 1,177,864 
shares of cumulative preferred stock, stated value $100 per share, 
issued in eleven series,\4\ which are traded over-the-counter 
(``Georgia OTC Preferred Stock'' and, together with the Georgia NYSE 
Preferred Stock, ``Georgia Preferred Stock''). Georgia has outstanding 
no other class of equity securities.
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    \3\ The three series of Georgia NYSE Preferred Stock consist of 
a $1.925 series, of which 1.1565 million shares are outstanding 
(``$1.925 Series''); an adjustable rate (first 1993) series, of 
which three million shares are outstanding (``AR1 1993 Series''); 
and an adjustable rate (second 1993) series, of which four million 
shares are outstanding (``AR2 1993 Series'').
    \4\ The eleven series of Georgia OTC Preferred Stock consist of 
a $4.60 series, of which 433,774 shares are outstanding (``$4.60 
Series''); a $4.60 1962 series, of which 70,000 shares are 
outstanding (``$4.60 1962 Series''); a $4.60 1963 series, of which 
70,000 shares are outstanding (``$4.60 1963 Series''); a $4.60 1964 
series, of which 50,000 shares are outstanding (''$4.60 1964 
Series''); a $4.72 series, of which 60,000 shares are outstanding 
(``$4.72 Series''); a $4.92 series, of which 100,000 shares are 
outstanding (``$4.92 Series''); a $4.96 series, of which 70,000 
shares are outstanding (``$4.96 Series''); a $5.00 series, of which 
14,090 shares are outstanding (``$5.00 Series''); a $5.64 series, of 
which 90,000 shares are outstanding (``$5.64 Series''); a $6.48 
series, of which 120,000 shares are outstanding (``$6.48 Series''); 
and a $6.60 series, of which 100,000 shares are outstanding (``$6.60 
Series'').
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    Subparagraph 14.A.3.f.(2) of Paragraph III of Georgia's Charter, as 
amended (``Georgia Charter''), currently provides that, so long as any 
shares of Georgia Preferred Stock are outstanding, without the 
affirmative vote of the holders of at least a majority of the total 
voting power of the outstanding Georgia Preferred Stock, Georgia shall 
not issue or assume any securities representing unsecured debt (other 
than for the purpose of refunding or renewing outstanding unsecured 
securities issued by Georgia resulting in equal or longer maturities or 
redeeming or otherwise retiring all outstanding shares of the Georgia 
Preferred Stock or of any senior or equally ranking stock) if, 
immediately after the issue or assumption, (1) the total outstanding 
principal amount of all securities representing unsecured debt of 
Georgia would exceed 20% of the aggregate of all existing secured debt 
of Georgia and the capital stock, premiums thereon and surplus of 
Georgia as stated on Georgia's books; or (2) the total outstanding 
principal amount of all securities representing unsecured debt of 
Georgia of maturities of less than ten years \5\ would exceed 10% of 
the aggregate (``Georgia Debt Limitation Provision'').
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    \5\ For the purpose of this provision, the payment due upon the 
maturity of unsecured debt having an original single maturity in 
excess of ten years or the payment due upon the final maturity of 
any unsecured serial debt which had original maturities in excess of 
ten years shall not be regarded as unsecured debt of a maturity less 
than ten years until the payment shall be required to be made within 
three years.
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    Subparagraph 14.A.3.f.(1) of Paragraph III of the Georgia Charter 
currently provides that, so long as any shares of Georgia Preferred 
Stock are outstanding, without the affirmative vote of the holders of 
at least a majority of the total voting power of the outstanding 
Georgia Preferred Stock, Georgia shall not dispose of all or 
substantially all of its property or merge or consolidate, unless the 
action has been approved by the Commission under the Act (``Georgia 
Merger Provision'').
    Subparagraph 14.A.3.b. (except the first paragraph therein) of 
Paragraph III of the Georgia Charter currently provides that, so long 
as any shares of Georgia Preferred Stock are outstanding, Georgia's 
payment of dividends on the Georgia Common Stock is limited to 50% of 
net income available for the stock during a period of 12 months if, 
calculated on a corporate basis, the ratio of Georgia Common Stock 
equity to total capitalization, including surplus, adjusted to reflect 
the payment of the proposed dividend, is below 20%, and to 75% of net 
income if the ratio is 20% or more but less than 25% (``Georgia Common 
Stock Dividend Provision'' and, together with the Georgia Debt 
Limitation Provision and the Georgia Merger Provision, ``Georgia 
Restriction Provisions'').

Gulf

    Gulf has outstanding 992,717 shares of common stock, no par value 
(``Gulf Common Stock''), all of which are held by Southern. Gulf's 
outstanding preferred stock consists of: (1) 151,026 shares of 
preferred stock, par value $100 per share, issued in three series,\6\ 
which

[[Page 60290]]

are traded over-the-counter (``Gulf $100 Preferred Stock''); and (2) 
1.4 million shares of Class A preferred stock, par value $10 per share, 
stated capital $25 per share, issued in two series,\7\ which are traded 
over-the-counter (``Gulf $10 Preferred Stock'' and, together with the 
Gulf $100 Preferred Stock, ``Gulf Preferred Stock''). Gulf has 
outstanding no other class of equity securities.
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    \6\ The three series of Gulf $100 Preferred Stock consist of a 
4.64% series, of which 51,026 shares are outstanding (``4.64% 
Series''); a 5.16% series, of which 50,000 shares are outstanding 
(``5.16% Series''); and a 5.44% series, of which 50,000 shares are 
outstanding (``5.44% Series'').
    \7\ The two series of Gulf $10 Preferred Stock consist of a 
6.72% series, of which 800,000 shares are outstanding (``6.72% 
Series''); and an adjustable rate (1993) series, of which 600,000 
shares are outstanding ``(AR 1993 Series'').
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    Paragraph (F)(b) under the ``General Provisions'' of the 
``Preferred Stock'' section of Gulf's Restated Articles of 
Incorporation, as amended (``Gulf Charter''), currently provides that, 
so long as any shares of Gulf Preferred Stock are outstanding, without 
the affirmative vote of the holders of at least a majority of the total 
voting power of the outstanding Gulf Preferred Stock, Gulf shall not 
issue or assume any securities representing unsecured debt (other than 
for the purpose of refunding or renewing outstanding unsecured 
securities issued by Gulf resulting in equal or longer maturities or 
redeeming or otherwise retiring all outstanding shares of the Gulf 
Preferred Stock or of any senior or equally ranking stock) if, 
immediately after the issue or assumption, (1) the total outstanding 
principal amount of all securities representing unsecured debt or Gulf 
would exceed 20% of the aggregate of all existing secured debt of Gulf 
and the capital stock, premiums thereon and surplus of Gulf as stated 
on Gulf's books; or (2) the total outstanding principal amount of all 
securities representing unsecured debt of Gulf maturities of less than 
ten years \8\ would exceed 10% of the aggregate (``Gulf Debt Limitation 
Provision'').
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    \8\ For the purpose of this provision, the payment due upon the 
maturity of unsecured debt having an original single maturity in 
excess of ten years or the payment due upon the final maturity of 
any unsecured serial debt which had original maturities in excess of 
ten years shall not be regarded as unsecured debt of a maturity less 
than ten years until the payment shall be required to be made within 
three years.
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    Paragraph (F)(a) under ``General Provisions'' of the ``Preferred 
Stock'' section of the Gulf Charter currently provides that, so long as 
any shares of Gulf Preferred Stock are outstanding, without the 
affirmative vote of the holders of at least a majority of the total 
voting power of the outstanding Gulf Preferred Stock, Gulf shall not 
dispose of all or substantially all of its property or merge or 
consolidate, unless the action has been approved by the Commission 
under the Act (``Gulf Merger Provision'').
    Paragraph (B) (except the first paragraph therein) under the 
``General Provisions'' of the ``Preferred Stock'' section of the Gulf 
Charter currently provides that, so long as any shares of Gulf 
Preferred Stock are outstanding (except as may be approved or permitted 
by the affirmative vote of the holders of at least two-thirds of the 
total voting power of the outstanding Gulf Preferred Stock), Gulf's 
payment of dividends on the Gulf Common Stock are limited to 50% of net 
income available for the stock during a period of 12 months if, 
calculated on a corporate basis, the ratio of Gulf Common Stock equity 
to total capitalization, including surplus, adjusted to reflect the 
payment of the proposed dividend, is below 20%, and to 75% of net 
income if the ratio is 20% or more but less than 25% (``Gulf Common 
Stock Dividend Provision'' and, together with the Gulf Debt Limitation 
Provision and the Gulf Merger Provision, ``Gulf Restriction 
Provisions'').

Mississippi

    Mississippi has outstanding 1.121 million shares of common stock, 
without par value (``Mississippi Common Stock''), all of which are held 
by Southern. Mississippi's outstanding preferred stock consists of: (1) 
936,160 shares of depositary preferred shares, each representing one-
fourth a share of preferred stock, par value $100 per share, issued in 
two series,\9\ which are traded on the New York Stock Exchange 
(``Mississippi NYSE Preferred Stock''); and (2) 160,099 shares of 
cumulative preferred stock, par value $1000 per share, issued in four 
series,\10\ which are traded over-the-counter (``Mississippi OTC 
Preferred Stock'' and, together with Mississippi NYSE Preferred Stock, 
``Mississippi Preferred Stock''). Mississippi has outstanding no other 
class of equity securities.
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    \9\ The two series of Mississippi NYSE Preferred Stock consist 
of a 6.32% series, of which 600,000 shares are outstanding (``6.32% 
Series''); and a 6.65% series, of which 336,160 shares are 
outstanding (``6.65% Series'').
    \10\ The four series of Mississippi OTC Preferred Stock consist 
of a 4.40% series, of which 40,000 shares are outstanding (``4.40% 
Series''); a 4.60% series, of which 20,099 shares are outstanding 
(``4.60% Series'')' a 4.72% series, of which 50,000 shares are 
outstanding (``4.72% Series''); and a 7.00% series, of which 50,000 
shares are outstanding (``7.00% Series'').
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    Subparagraph (F)(b) of Paragraph FOURTH under ``General 
Provisions'' of the ``Preferred Stock'' section of Mississippi's 
Articles of Incorporation, as amended (``Mississippi Charter''), 
currently provides that, so long as any shares of Mississippi Preferred 
Stock are outstanding, without the affirmative vote of the holders of 
at least a majority of the outstanding Mississippi Preferred Stock, 
Mississippi shall not issue or assume any securities representing 
unsecured debt (other than for the purpose of refunding or renewing 
outstanding unsecured securities issued by Mississippi resulting in 
equal or longer maturities or redeeming or otherwise retiring all 
outstanding shares of the Mississippi Preferred Stock or any senior or 
equally ranking stock) if, immediately after the issue or assumption, 
(1) the total outstanding principal amount of all securities 
representing unsecured debt of Mississippi would exceed 20% of the 
aggregate of all existing secured debt of Mississippi and the capital 
stock, premiums thereon and surplus of Mississippi as stated on 
Mississippi's books; or (2) the total outstanding principal amount of 
all securities representing unsecured debt of Mississippi of maturities 
of less than ten years \11\ would exceed 10% of the aggregate 
(``Mississippi Debt Limitation Provision'').
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    \11\ For the purpose of this provision, the payment due upon the 
maturity of unsecured debt having an original single maturity in 
excess of ten years or the payment due upon the final maturity of 
any unsecured serial debt which had original maturities in excess of 
ten years shall not be regarded as unsecured debt of a maturity less 
than ten years until the payment shall be required to be made within 
three years.
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    Subparagraph (F)(a) of Paragraph FOURTH under the ``General 
Provisions'' of the ``Preferred Stock'' section of the Mississippi 
Charter currently provides that, so long as any shares of Mississippi 
Preferred Stock are outstanding, without the affirmative vote of the 
holders of at least a majority of the outstanding Mississippi Preferred 
Stock, Mississippi shall not dispose of all or substantially all of its 
property or merge or consolidate, unless the action has been approved 
by the Commission under the Act (``Mississippi Merger Provision'').
    Subparagraph (B) (except the first paragraph therein) of Paragraph 
FOURTH under ``General Provisions'' of the ``Preferred Stock'' section 
of the Mississippi Charter currently provides that, so long as any 
shares of Mississippi Preferred Stock are outstanding, Mississippi's 
payment of dividends on the Mississippi Common Stock are limited to 50% 
of net income available for the stock during a period of 12 months if, 
calculated on a corporate

[[Page 60291]]

basis, the ratio of Mississippi Common Stock equity to total 
capitalization, including surplus, adjusted to reflect the payment of 
the proposed dividend, is below 20%, and to 75% of net income if the 
ratio is 20% or more but less than 25% (``Mississippi Common Stock 
Dividend Provision'' and together with the Mississippi Debt Limitation 
Provision and the Mississippi Merger Provision, ``Mississippi 
Restriction Provisions'' and, Mississippi Restriction Provisions 
together with Georgia Restriction Provisions, Gulf Restriction 
Provisions and Alabama Restriction Provisions ``Subsidiary Restriction 
Provisions).
    Each Subsidiary proposes to solicit proxies (``Proxy 
Solicitation'') from the holders of its outstanding shares of Preferred 
Stock of each series (except in the case of Georgia for the $1.925 
Series) and Common Stock for use at a special meeting of its 
stockholders (``Special Meeting'') to consider a proposed amendment to 
its Charter that would in each case eliminate the Subsidiary 
Restriction Provisions (``Proposed Amendment''). Adoption of the 
Proposed Amendment requires the affirmative vote at a Subsidiary's 
Special Meeting (in person by ballot or by proxy) of the holders of at 
least (1) two-thirds of the voting power of the outstanding shares of 
the Preferred Stock of all Series, voting together as one class, and 
(2) in the case of Georgia, two-thirds of the Common Stock, and in the 
case of Alabama, Gulf and Mississippi, a majority of the Common Stock. 
Southern will vote its shares of Common Stock in favor of the Proposed 
Amendment. The Subsidiaries have engaged Corporate Investor 
Communications, Inc. to act as information agent in connection with the 
Proxy Solicitations for a fee plus reimbursement of reasonable out-of-
pocket expenses.
    If a Proposed Amendment is adopted, Alabama, Georgia, Gulf and 
Mississippi, as the case may be, propose to make a special cash payment 
equal to 1.00% of the par value, stated value or stated capital, as 
applicable, per share of the Preferred Stock (except that the special 
cash payment shall equal 0.25% of the stated capital per share for 
shares of the Alabama 1988 Auction Stock and the Alabama 1993 Preferred 
Stock) (each, a ``Special Cash Payment'') for each share of Preferred 
Stock (each, a ``Share'' except for Shares of Georgia's $1.925 Series) 
properly voted at the Social Meeting in favor of the Proposed 
Amendment, provided that the Shares are not tendered under the 
concurrent cash tender offer described below. Alabama, Georgia, Gulf 
and Mississippi will disburse Special Cash Payments out of their 
general funds, promptly after adoption of a Proposed Amendment.
    Currently with the commencement of the Proxy Solicitations, subject 
to the terms and conditions stated in the relevant offering 
documents,\12\ Southern proposes to make offers (each an ``Offer'') to 
the holders of Alabama's Preferred Stock of the 4.20% Series (``Alabama 
Tendered Series''), Georgia's Preferred Stock of the $4.60 Series, the 
$4.60 1962 Series, the $4.60 1963 Series, the $4.60 1964 Series, the 
$4.72 Series, the $4.92 Series, the $4.96 Series, the $5.00 Series and 
the $5.64 Series (collectively, ``Georgia Tendered Series''), Gulf's 
Preferred Stock of each series (collectively, ``Gulf Tendered Series'') 
and Mississippi's Preferred Stock of the 4.40% Series, the 4.60% Series 
and the 4.72% Series (collectively, ``Mississippi Tendered Series''), 
under which Southern will offer to acquire from the holders of the 
Alabama, Georgia, Gulf and Mississippi Preferred Stock of each Tendered 
Series any and all Shares of that series at the cash purchase prices to 
be specified in the Offer (subject to potential increase or decrease 
under the terms of the Offer) (``Purchase Price''). Southern 
anticipates that the Offer for each Tendered Series of Preferred Stock 
will be scheduled to expire at 5:00 P.M. (New York City time) on the 
date of the Special Meeting, (``Expiration Date'').
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    \12\ With respect to Shares subject to both the Proxy 
Solicitation and Southern's offer to the holders of certain 
Preferred Stock, the transactions will be effected by means of the 
same core document--a combined proxy statement and issuer tender 
offer statement under the Securities Exchange Act of 1934 
(``Exchange Act'') and applicable rules and regulations thereunder.
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    In addition, Georgia has entered into an agreement to purchase 
shares of its AR1 1993 Series and AR2 1993 Series from the holders of 
the Georgia NYSE Preferred Stock (collectively, ``AR2 1993 Series''). 
It is proposed that, subject to Commission authorization herein, 
Georgia may assign its rights under the contract to Southern, which it 
is expected would than purchase shares of the AR 1993 Series not later 
than the time at which Southern purchases the shares under the Georgia 
Offer, and Georgia would purchase the shares of the AR 1993 Series from 
Southern (at the price paid by Southern) not later than the time at 
which Georgia purchases Shares sold to Southern under the Georgia 
Offer.
    The Offer consists of separate requests to acquire each of the 
Alabama Tendered Series, the nine Georgia Tendered Series, the five 
Gulf Tendered Series and the three Mississippi Tendered Series 
(collectively, ``Tendered Series''), with the offer for any one 
Tendered Series being independent of the offer for any other Tendered 
Series. The applicable Purchase Price and the other terms and 
conditions of the Offers apply equally to all Preferred Stockholders of 
the respective Tendered Series. The Offers are not conditioned upon any 
minimum number of Shares of the applicable Tendered Series being 
tendered, but are conditioned, among other things, on the Proposed 
Amendments being adopted at the respective Special Meetings. Subject to 
the terms of the offering documents, Southern will purchase at the 
applicable Purchase Price any and all Shares of any Tendered Series 
that are validly tendered and not withdrawn prior to the Expiration 
Date.
    To tender Shares according to the terms of the offering documents, 
the tendering Preferred Stockholder must either: (1) send to The Bank 
of New York, in its capacity as depositary for the Offer 
(``Depositary''), a properly completed and duly executed Letter of 
Transmittal and Proxy for that Series (if not voting at the Special 
Meeting in person by ballot), together with any required signature 
guarantees and any other documents required by the Letter of 
Transmittal and Proxy, and either (a) certificates for the Shares to be 
tendered must be received by the Depositary at one of its addresses 
specified in the offering documents, or (b) the Shares must be 
delivered under the procedures for book-entry transfer described in the 
offering documents (and a confirmation of the delivery must be received 
by the Depositary), in each case by the Expiration Date; or (2) comply 
with a guaranteed delivery procedure specified in the offering 
documents. Tenders of Shares made under an Offer may be withdrawn at 
any time prior to the Expiration Date. Thereafter, the tenders are 
irrevocable, subject to certain exceptions identified in the offering 
documents.
    Southern states that its obligations to proceed with the Offers and 
to accept for payment and to pay for any Shares tendered will be made 
in accordance with rule 51 under the Act and are subject to various 
conditions enumerated in the offering documents, including receipt of a 
Commission order under the Act authorizing the proposed transactions 
and the adoption of the Proposed Amendments at the Special Meetings.
    At any time or from time to time, Southern may extend the 
Expiration Date applicable to any Series by giving notice of the 
extension to the Depositary, without extending the

[[Page 60292]]

Expiration Date for any other Series. During any extension, all shares 
of the applicable Series previously tendered will remain subject to the 
Offer, and may be withdrawn at any time prior to the Expiration Date as 
extendedy.
    Conversely, Southern may elect in its sole discretion to terminate 
the Offer prior to the scheduled Expiration Date and not accept for 
payment and pay for any Shares tendered, subject to applicable 
provisions of rule 13e-4 under the Exchange Act requiring Southern 
either to pay the consideration offered or to return the Shares 
tendered promptly after the termination or withdrawal of the Offer, 
upon the occurrence of any of the conditions to closing enumerated in 
the offering documents, by giving notice of the termination to the 
Depository and making a public announcement thereof.
    Subject to compliance with applicable law, Southern further 
reserves the right in the offering documents, in its sole discretion, 
to amend one or more Offers in any respect by making a public 
announcement thereof. If Southern materially changes the terms of an 
Offer or the information concerning an Offer, or if it waives a 
material condition of an Offer, Southern will extend the Expiration 
Date to the extent required by the applicable provisions of rule 13e-4 
under the Exchange Act. Those provisions require that the minimum 
period during which an issuer tender offer must remain open following 
material changes in the terms of the offer or information concerning 
the offer (other than a change in price or change in percentage of 
securities sought) will depend on the facts and circumstances, 
including the relative materiality of the terms or information. If an 
Offer is scheduled to expire at any time earlier than the expiration of 
a period ending on the tenth business day from, and including, the date 
that Southern notifies Preferred Stockholders that it will: (1) 
increase or decrease the price it will pay for Shares; (2) decrease the 
percentage of Shares it seeks; or (3) increase or decrease soliciting 
dealer's fees, the Expiration Date will be extended until the 
expiration of the period of ten business days.
    Shares validly tendered to the Depositary under an Offer and not 
withdrawn according to the procedures stated in the offering documents 
will be held by Southern until the Expiration Date (or returned if the 
Offer is terminated). Subject to the terms and conditions of the Offer, 
as promptly as practicable after the Expiration Date, Southern will 
accept for payment (and thereby purchase) and pay for shares validly 
tendered and not withdrawn. Southern will pay for Shares that it has 
purchased under the Offer by depositing the applicable Purchase Price 
with the Depositary, which will act as agent for the tendering 
Preferred Stockholders to receive payment from Southern and transmit 
payment to tendering Preferred Stockholders. Southern will pay all 
stock transfer taxes, if any, payable on account of its acquisition of 
Shares under the Offer, except in certain circumstances where special 
payment or delivery procedures are utilized in conformance with the 
applicable Letters of Transmittal and Proxy.
    With respect to Shares validly tendered and accepted for payment by 
Southern, each tendering Preferred Stockholder will be entitled to 
receive as consideration from Southern only the applicable Purchase 
Price (which Southern anticipates will reflect a premium over the 
current market price at the commencement of the Offers). Any holder 
will not be entitled to receive, with respect to the tendered Shares, 
additional consideration in the form of a Special Cash Payment.
    As noted above, subject to the terms and conditions of the Offer, 
Shares validly tendered and not withdrawn will be accepted for payment 
and paid for by Southern as promptly as practicable after the 
Expiration Date. If a Proposed Amendment is adopted at a Subsidiary's 
Special Meeting, promptly after consummation of the Offer the 
Subsidiary will purchase the Shares sold to Southern under the Offer at 
the relevant Purchase Price plus expenses incurred in the Offer, and 
the Subsidiary will retire and cancel the Shares.
    If a Proposed Amendment is not adopted at the Special Meeting, 
Southern may elect, but is not obligated, to waive the condition, 
subject to applicable law. In that case, as promptly as practicable 
after Southern's waiver and purchase of any Shares validly tendered 
under the Offers, the affected Subsidiary anticipates that it may 
either adjourn the Special Meeting or call another special meeting of 
its common and preferred stockholders and solicit proxies therefrom for 
the same purpose as in the instant proceeding, i.e., to secure the 
requisite two-thirds affirmative vote of preferred stockholders to 
amend the Charter to eliminate the Restriction Provisions. At that 
meeting, Southern would vote any Shares it acquired under the Offer or 
otherwise \13\ (as well as all of its shares of Common Stock) in favor 
of the proposed Charter amendment to eliminate the Restriction 
Provisions.\14\ If the proposed amendment is adopted at that meeting, 
and in any event within one year from the Expiration Date (including 
any potential extension thereof under the Offer), Southern will 
promptly after the meeting or at the expiration of the one-year period, 
as applicable, sell the Shares to the Subsidiary at the Purchase Price 
plus expenses paid under the Offer, and the Subsidiary will then retire 
and cancel the Shares. Merrill Lynch, Pierce, Fenner & Smith 
Incorporated will act as dealer manager for Southern in connection with 
the Offers.\15\
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    \13\ Following the Expiration Date and the consummation of the 
purchase of Shares under the Offer, Southern or one or more 
Subsidiaries may determine to purchase additional Shares on the open 
market, in privately negotiated transactions, through one or more 
tender offers or otherwise. Southern will not undertake any such 
transactions without receipt of any required Commission 
authorizations under the Act in one or more separate proceedings. 
Likewise, if a further special meeting is necessary, the 
Subsidiaries would not undertake any associated proxy solicitation 
and proposed Charter amendment prior to receipt of any required 
Commission authorizations under the Act in a separate proceeding.
    \14\ By contrast, if a Subsidiary, rather than Southern, had 
acquired Shares under the Offer, upon acquisition by the Subsidiary 
any Shares would be deemed treasury shares under Alabama, Georgia, 
Maine and Mississippi law, as the case may be, and, the Subsidiary 
would be precluded from voting those Shares under any circumstances.
    \15\ Southern proposes to agree to pay the dealer manager a fee 
for Shares tendered, accepted for payment and paid for pursuant to 
the Offer and a fee for any Shares that are not tendered pursuant to 
the Offers but which are voted in favor of the Proposed Amendment, 
and to reimburse the dealer manager for certain of its reasonable 
out-of-pocket expenses. In addition, Southern proposes to pay a 
solicitation fee for any Shares tendered, accepted for payment and 
paid for pursuant to the Offer and each Subsidiary proposes to pay a 
separate fee for any of their respective Shares that are not 
tendered pursuant to the Offer but which vote in favor of the 
Proposed Amendment.
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    To finance its purchase of any Shares tendered, accepted for 
payment and paid for under the Offer, Southern intends to use its 
general funds and/or incur short-term indebtedness in an amount 
sufficient to pay the Purchase Price for all tendered Shares.
    The Subsidiaries state that they consider the Restriction Provision 
a significant impediment to their ability to maintain financial 
flexibility and minimize their financing costs, to the detriment of 
their utility customers and, indirectly, Southern's shareholders. 
Southern and the Subsidiaries assert that the ongoing financing 
flexibility and cost benefits to be gained by the Subsidiaries as a 
result of elimination of the Restriction Provisions outweigh the one-
time cost of the Special Cash Payments and the other costs of the Proxy 
Solicitation. Southern and the Subsidiaries further represent that the 
terms of the purchase of Shares under

[[Page 60293]]

the Offers will benefit not only tendering Preferred Stockholders (by 
affording certain Preferred Stockholders who may not favor the 
elimination of the Restriction Provisions an option to exit the 
Preferred Stock at a premium to the market price and without the usual 
transaction costs associated with a sale) but also, taking into account 
all related transaction costs, Southern's shareholders and Southern 
System utility customers by: (1) contributing to the elimination of the 
Restriction Provisions; and (2) resulting in the acquisition and 
retirement of outstanding Shares and their potential replacement with 
comparatively less expensive financing alternatives, such as short-term 
debt.
    As noted, the Subsidiaries propose to submit the Proposed Amendment 
for consideration and action at special meetings of the stockholder 
and, in connection therewith, to solicit proxies from the holders of 
their capital stock. The Subsidiaries request that the effectiveness of 
the application-declaration with respect to the Proxy Solicitations on 
the Proposed Amendments be permitted to become effective immediately, 
under rule 62(d).
    The applicants also request authorization to deviate from the 
preferred stock provisions of the Statement of Policy Regarding 
Preferred Stock Subject to the Public Utility Holding Company Act of 
1935, HCAR No. 13106 (Feb. 16, 1956), to the extent applicable with 
respect to the Proposed Amendments.
    It appears to the Commission that the application-declaration to 
the extent that it relates to the proposed solicitation of proxies 
should be permitted to become effective immediately under rule 62(d):
    It is ordered, that the application-declaration, to the extent that 
it relates to the proposed solicitation of proxies be, and it hereby 
is, permitted to become effective immediately under rule 62 and subject 
to the terms and conditions prescribed in rule 24 under the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-29418 Filed 11-6-97; 8:45 am]
BILLING CODE 8010-01-M