Evening star., 1941-08-13
5. {. {. Maps Change,
In Virginia Public
Service Corp.
Proposed SimpIifieution
To Be Considered at
Hearing September q
BY the Associated Press.

BY the Associated Press.
The Securities Commission an
nounced yesterday a proceeding to
require Virginia Public Service Co.
to revise and simplify its corporate
structure and take other steps to
fairly and equitably redistribute
voting power among its security
holders"
The order also named four par
ents of Virginia Public Service
Southeastern Electric & Gas Co,
General Gas & Electric Corp, Asso-
ciated Gas e. Electric Corp. and As
sociated Gas & Electric Co, which
control GIG per cent OF the voting
power. A hearing was set for Sep
tember %.
The commission on July % re-
jected a SAC. 1000. 900 financing plan of
Virginia Public Service and an
nounced then that simplification
action would be taken.
Voting Revision Urged.
liC ~ f. ~. SId11 ALI q kEGOit
the company, said:
1T is readily apparent that at
the present time the voting power
of Public Service is unfairly and in
equitably distributed among its Sc
curity holders: that redistribution
of voting power among the equity
security holders of Public Service
would still leave the voting control
with the owners of disproportion
ately small investment: that re-
capitalization of Public Service is.
therefore, essential to effect a fair
ALLEGATION of voting power. *''
Such apitalization will pro-
vide the company with the addi-
tional funds required for new con-
struction. or will place it in a posi-
ton to obtain such funds without
the difficulties now existing by rea-
son of its topheavy capital struc-
ture and the inequitable distribu-
ton of It's voting power"
The commission declared in its
order that it was apparent that the
demand for power in the areas
served by Virginia Public Service
had increased greatly in recent years
particularly in view of defense
activities in the area" and that
very substantial construction will
be required to avoid a critical
shortage of power"
The company operates electric
utilities in A counties in Virginia,
counties in West Virginia and l
community in North Carolina. Its
gross revenues last year were s79.-
165,l63. Southeastern Electric owns
all Of Virginia's common stock,
which presently accounts for 1913
per cent Of the voting power.
Valuations to Be Reviewed.
Among the questions which the
S. E. c. said would be taken up was
whether Public Service should be
required to restate its plant and
investments and other accounts so
as to Segregate, dispose OF and elm
mate write-ups and excessive valua
tlonS" and set up adequate equity
reserves for retirements and de-
probation"
After discussing the company's
history the staff report said that
the corporate structure ''is an OBJ
stacle to present and future financ-
ing of Public Service" because of
its highly complex" capital struc-
ture. because debt and preferred
stock liabilities are in excess of its
fixed property, thus leaving no mar
gin for present common stock; be-
cause of past policy of 'distribu-
ton of capital in the guise of earn
lngs" and because of serious prob
lens raised by demands for servicing
debt requirements during the next
five years.