The Federal Energy Regulatory Commission on Dec. 24 approved changes related to a corporate reorganization affecting hydropower operator Verso Androscoggin Power Holdings LLC.
On Nov. 25, Verso Androscoggin Power LLC sought authorization for the disposition of jurisdictional facilities in connection with a two-step internal corporate reorganization within the Verso Paper Corp. family of companies.
- In Step 1, Verso Maine Power Holdings LLC, which wholly owns the applicant, will contribute 100% of the equity interests in applicant to a to-be-formed direct, wholly owned subsidiary of Verso Maine Power Holdings that will be named Verso Androscoggin Power Holdings LLC.
- In Step 2, a to-be-formed wholly owned subsidiary (NewPage Subsidiary) of NewPage Corp. will acquire 100% of the equity interests in Verso Androscoggin Power Holdings from Verso Maine Power Holdings.
The transaction will not be consummated unless and until NewPage Holdings Inc., the indirect parent of NewPage Corp., merges with Verso Merger Sub Inc., an indirect wholly owned subsidiary of Verso, with NewPage Holdings continuing as the surviving entity and an indirect, wholly owned subsidiary of Verso.
Applicant owns and operates 23 hydroelectric facilities, totaling 29.2 MW, located at or near the Androscoggin paper mill in Jay, Maine, within the ISO New England (ISO-NE) market. Applicant is a direct, wholly owned subsidiary of Verso Maine Power Holdings, which is an indirect, wholly owned subsidiary of Verso.
Verso, based in Memphis, Tennessee, is engaged in the business of producing paper products at paper mills located in Maine and Michigan. Verso is a publicly held company whose common stock is traded on the New York Stock Exchange. Investment funds managed by Apollo Management VI LP own 68%, and management and the public own 32%, of the outstanding shares of Verso’s common stock. Applicant states that, aside from Apollo, no single entity or individual owns 10% or more of Verso’s outstanding shares.
Verso indirectly owns several public utility subsidiaries: Verso Androscoggin LLC, Verso Bucksport LLC, Verso Bucksport Power LLC, Verso Maine Energy LLC, Verso Paper LLC, and Verso Quinnesec within the footprints of ISO-NE and of the Midcontinent Independent System Operator (MISO).
NewPage Corp. is an indirect wholly owned subsidiary of NewPage Holdings, a manufacturer of coated paper in North America. According to applicant, itis contemplated that, subject to and upon the consummation of the merger transaction, NewPage Corp. will become an indirect, wholly owned subsidiary of Verso and an affiliate of applicant at the time the transaction is consummated.
NewPage Corp. indirectly owns several public utility subsidiaries: Escanaba Paper Company, Luke Paper Company, Rumford Paper Company, Consolidated Water Power Company and NewPage Wisconsin LLC within the footprints of ISO-NE, MISO, and the PJM Interconnection.
Applicant states that the transaction will occur in two transactional steps, neither of which will occur unless both occur. After Step 1 of the transaction is consummated but before Step 2 is consummated, applicant will be a direct, wholly owned subsidiary of Verso Androscoggin Power Holdings and an indirect wholly owned subsidiary of Verso Maine Power Holdings. Applicant adds that, upon consummation of Step 2, Verso Androscoggin Power Holdings and applicant will be indirect, wholly owned subsidiaries of NewPage Corp., which at that time will be an indirect, wholly owned subsidiary of Verso. Upon consummation of the transaction, Verso Maine Power Holdings will cease to own any interest in applicant, and NewPageCorp. will indirectly own 100% of the equity interests in applicant. The transaction does not result in a change of control of applicant, as Verso will continue to own indirectly 100% of the equity interests in applicant.