LAS VEGAS, June 30 /PRNewswire/ -- ONEOK Inc. (NYSE: OKE) and Southwest
Gas Corp.(NYSE: SWX) have reached agreement with the Arizona Corporation
Commission (ACC) Staff and the Residential Utility Consumers Office (RUCO) on
terms and conditions governing the proposed combination of the two natural gas
"This agreement with the ACC Staff and RUCO in Arizona is another major
step toward successful implementation of the combination of Southwest Gas with
ONEOK," said Michael Maffie, chairman and chief executive officer of Southwest
Gas. "The speed with which we have reached a settlement agreement in Arizona
underscores the benefits that this merger will provide to customers as well as
shareholders of Southwest Gas."
Under terms of the Settlement Agreement:
-- ONEOK commits to provide financing to close the transaction with an
unsecured debt credit rating of at least BBB+.
-- All acquisition-related costs will be recorded and treated "below the
line" for regulatory purposes, which means that shareholders, rather
than utility ratepayers, will pay for all such costs.
-- A one-time merger-related credit of nearly $5.5 million will be made to
the Gas Cost Balancing Account for Arizona customers. In effect, this
is a pre-payment to Arizona customers of expected merger-related
-- In future rate cases, any merger-related savings may be split 50/50
between the Company and customers.
The parties also agreed to accounting and other methodological procedures,
and agreed to implement designated safety-related activities in Arizona within
specified times. ONEOK agreed to follow safety levels initiated and
maintained by Southwest Gas.
Under procedures established by the ACC, a hearing is expected to be held
later this summer and the Commission could vote on the settlement at an open
meeting subsequently scheduled.
The ONEOK-Southwest Gas merger already has been unanimously approved by
the Public Utilities Commission of Nevada (PUCN). In announcing that
approval, PUCN Chairman Judy Sheldrew stated, "The parties are to be
congratulated on a very comprehensive settlement. This is really a terrific
settlement and clearly appears to be something that is very definitely in the
In addition to approval by the ACC, the proposed utility combination also
must be approved by the California Public Utilities Commission (CPUC). The
expected regulatory timetable will result in a decision by the CPUC during the
early fall, Southwest Gas said.
The acquisition of Southwest Gas also must be approved by its
shareholders, who will vote on the matter at the Annual Shareholders Meeting
scheduled for August 10, 1999.
If all approvals are obtained on the expected timelines, the acquisition
is expected to be completed about mid-November. Shareholders of Southwest Gas
will receive $30 cash from ONEOK for each common share of Southwest Gas.
SOURCE Southwest Gas Corporation
Company News On-Call: http: //www.prnewswire.com/comp/804969.html or fax, 800-758-5804, ext. 804969
CONTACT: Media: Lew Phelps, 310-788-2850, or Mike Geczi, 212-573-6100, both of Sitrick and Company; or Shareholders: Laura Hobbs of Southwest Gas Corporation, 702-876-7237