Cinergy Corp · 35-CERT · On 2/13/98

Filed On 2/13/98   ·   SEC File 70-08589   ·   Accession Number 899652-98-12

Certificate Concerning Terms and Conditions of a Transaction   ·   Form 35-CERT
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 35-CERT     Certification of Notification (Rule 24)                3±    15K 
 2: EX-99.A     Exhibit A                                              2±     9K 

35-CERT   ·   Certification of Notification (Rule 24)

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SECURITIES AND EXCHANGE COMMISSION                                              
Washington, D.C.  20549                                                         

In the Matter of                    CERTIFICATE                                 
Cinergy Corp. et al.                OF                                          
File No.  70-8589                   NOTIFICATION                                

(Public Utility Holding Company Act of 1935)                                    

 With reference to the calendar quarterly period ended December 31, 1997
("Fourth Quarter 1997") and the transactions (a) proposed in the Application-   
Declaration on Form U-1, as amended, in the above proceeding filed by Cinergy   
Corp. ("Cinergy"), a registered holding company under the Public Utility        
Holding Company Act of 1935, as amended (the "Act"), Cinergy Investments,       
Inc., Cinergy's nonutility subholding company ("Cinergy Investments"), and      
Cinergy Services, Inc., Cinergy's service company subsidiary ("Cinergy          
Services"), and (b) authorized by the Commission in its orders dated March 8,   
1996 (Rel. No. 35-26486) and September 21, 1995 (Rel. No. 35-26376), Cinergy    
Services hereby notifies the Commission as follows:                             

1.   At December 31, 1997, Cinergy had an "aggregate investment" (as defined    
in rule 53(a)(1)(i)) of approximately $486 million, applied as set forth        
below among the following exempt wholesale generators ("EWGs") and foreign      
utility companies ("FUCOs"):                                                    

 *  Midlands Electricity plc ("Midlands") - approximately $476.7 million

*  EDESUR, S. A. ("Edesur") - approximately $9.5 million              

 *  Copperbelt Energy Corporation plc ("CEC") - $0; Cinergy's investment
in CEC was financed entirely with funds and/or guarantees none of which are     
recourse, directly or indirectly, to Cinergy (see below).                       

2.   At December 31, 1997, Cinergy's "consolidated retained earnings" (as       
defined in rule 53(a)(1)(ii)) - i.e., the average of Cinergy's consolidated     
retained earnings for the four most recent quarterly periods, including the     
quarterly period ended December 31, 1997, as reported on Cinergy's Reports on   
Form 10-Q and/or 10-K filed under the Securities Exchange Act of 1934 - were    
approximately $986 million.                                                     

3.   Accordingly, at December 31, 1997, Cinergy had available capacity under    
rule 53(a)(1) of approximately $7 million.                                      

4.   Effective November 21, 1997, Cinergy acquired a 39% equity interest in     
CEC, a FUCO organized under the laws of Zambia that holds certain electric      
generation, transmission and distribution assets formerly held by the           
Republic of Zambia ("GRZ") through the Power Division of Zambia Consolidated    
Copper Mines Limited ("ZCCM").  In the same transaction, an affiliate of The    
National Grid Company plc, a UK company ("NGA"), purchased a 39% equity         
interest, ZCCM retained a 20% equity interest, and local management of CEC      
retained the remaining equity interest.                                         

*  Cinergy's 39% interest is held by MPII (Zambia) B.V. ("MPII/Z"), a 
Netherlands company, substantially all of whose equity is held by Cinergy       
Investments MPI, Inc. ("CinMPI"), a Delaware corporation which in turn is a     
wholly-owned subsidiary of Cinergy Investments.  (See the corporate chart       
filed herewith as Exhibit A.)                                                   

*  The purchase price paid by MPII/Z for its acquisition of shares in 
CEC aggregating a 39% ownership interest was $29,000,000.  The ultimate         
source for payment of the purchase price was a concurrent borrowing in that     
amount by Cinergy UK, Inc. ("CUK") under its $115 million Credit Agreement      
with Barclays Bank ("CUK Credit Facility")./1/                                  

      **In particular, CUK loaned the entire $29 million in funds borrowed
under the CUK Credit Facility to its parent company, Cinergy Investments,       
which then loaned the funds to CinMPI, its direct subsidiary, which in turn     
acquired for $29 million 100% of the equity of MPII/Z, which applied those      
funds to the purchase price for the shares in CEC.                              

*  In connection with their respective share purchases, CUK and NGA   
executed a Deed of Support to the GRZ and ZCCM in respect of the continued      
development and operation of CEC's business, including a joint investment       
commitment of CUK and NGA in an amount not to exceed $30,000,000 if such        
investment commitment is not satisfied by CEC from its own resources.  In       
connection with the Deed of Support and the joint obligations thereunder, CUK   
and NGA entered into a Deed of Counter-Indemnity agreeing to indemnify each     
other for any amounts paid by either party under the Deed of Support            
exceeding 50% of the total amounts paid to GRZ and NGA.  Any amounts required   
to be paid by CUK under the Deed of Support or the Deed of Counter-Indemnity    
would be financed entirely with the proceeds of borrowings by CUK under the     
CUK Credit Facility.                                                            

5.   Effective December 31, 1997, CGE ECK, Inc. was dissolved.  Earlier in      
1997, CGE ECK had sold to a non-affiliate its sole asset - a 3% ownership       
interest in a Czech electric utility company, ECK s.r.o.                        

6.   Information on intercompany service transactions involving Exempt          
Entities/2/ during the Fourth Quarter 1997:                                     

*    Cinergy Services provided legal services to PSI Argentina for a  
total cost of approximately $1,000.                                             

*  Cinergy Services provided accounting, finance, energy-related      
facility maintenance, and legal services to CinMPI and its subsidiaries for     
a total cost of approximately $44,000.                                          

*    Cinergy Services provided accounting, executive, finance, human  
resources, and legal services to CUK for a total cost of approximately          
$409,000.                                                                       

7.  Financial statements with respect to the Fourth Quarter 1997 for the        
Exempt Entities will be filed with Cinergy's Annual Report on Form U5S for      
the year ended December 31, 1997.                                               

S I G N A T U R E         

Pursuant to the requirements of the Act, the undersigned company has  
duly caused this document to be signed on its behalf by the undersigned         
thereunto duly authorized.                                                      

Date:     February 13, 1998                                                     

              CINERGY SERVICES, INC.

                 By: /s/William L. Sheafer
                    Vice President and Treasurer

ENDNOTES          

/1/  All borrowings under the CUK Credit Facility are recourse solely to CUK    
and its assets, which include Cinergy's 50% interest in the joint venture       
company that owns Midlands Electricity plc.                                     

/2/   As used herein, "Exempt Entities" refers to (a) Cinergy's existing FUCO   
investments - PSI Energy Argentina, Inc. (which holds PSI Energy Inc.'s         
investment in Edesur) ("PSI Argentina"), Midlands and CEC - together with (b)   
the various special purpose subsidiaries of Cinergy established to hold or      
administer these existing FUCO investments or to facilitate investments in or   
operation or administration of additional FUCOs or EWGs in the future           
(collectively, "Project Parents").  Currently active Project Parents comprise   
the following companies: CUK, Avon Energy Partners Holdings, Avon Energy        
Partners plc, CinMPI, MPII/Z and MPI International Limited.                     

Dates Referenced Herein   and   Documents Incorporated By Reference

This 35-CERT Filing		Date		Other Filings
		9/21/95
		3/8/96
		11/21/97
		12/31/97		U-13-60, U5S, 11-K, U-9C-3, 10-K
Filed On / Filed As Of		2/13/98		U-57, 35-CERT
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