Hydro seeks to buy back its oldest preferred stock

BANGOR – Bangor Hydro-Electric Co. announced plans Wednesday to buy back all 25,000 outstanding shares of the company’s oldest preferred stock.

The offer is $115 per share in cash for outstanding shares of Bangor Hydro’s 7 percent Series of Preferred Stock, which were issued by Bangor Street Railway and Electric Co., a corporate predecessor of Bangor Hydro, between 1910 and 1924. The deadline for shareholders to respond to the offer is Thursday, Feb. 27.

The stock is traded over the counter under the symbol BANGN.

On Dec. 31, 2002, Bangor Hydro gave notice to holders of its 4 percent and 41/4 percent callable series of preferred stock, its only other publicly traded securities, that it was calling those shares.

Rod Black, Bangor Hydro’s manager of finance and accounting, said Wednesday that current interest rates made the buyback attractive at this time and would save the company money in the long run, especially when considering the costs of filing regulatory paperwork on publicly traded securities

“It’s very expensive to report to the [Securities and Exchange Commission]. You can’t imagine how much work it is,” he said. And in the wake of the Enron scandal, those regulations are expanding dramatically, he said.

Black said Bangor Hydro hoped to buy all 25,000 outstanding shares of the 7 percent stock. If the number of shareholders can be reduced to less than 300, Bangor Hydro can ask the SEC for a waiver to avoid the regulations.

Black said Wednesday he wasn’t sure how many shareholders held the outstanding 7 percent stock shares.

The shares have traded infrequently in the past and have traditionally sold for less than $100, so the $115 offer should encourage shareholders to sell, according to Black.

Georgeson Shareholder Securities Corp. has been retained by Bangor Hydro to serve as dealer manager for the offer,

Georgeson Shareholder Communications Inc. has been retained to serve as information agent, and EquiServe Trust N.A. has been retained to serve as depository.

Questions regarding the terms of the offer should be directed to the information agent, at (866) 328-5445 (toll-free).

Bangor Hydro was organized under the laws of Maine in 1924. Since a merger in October 2001, Bangor Hydro has been a wholly owned subsidiary of Emera Inc. of Halifax, Nova Scotia.