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PPL Corporation and PPL Energy Supply, LLC, Announce Consent Solicitation for 2-5/8% Convertible Senior Notes Due 2023
PPL Corporation (NYSE: PPL) and its indirect wholly owned subsidiary, PPL Energy Supply, LLC, today announced that they are soliciting consents from the holders of PPL Energy Supply's outstanding $400 million 2-5/8% Convertible Senior Notes due 2023 (CUSIP numbers 69352JAD9 and 69352JAE7) to amend certain provisions of the indenture dated May 21, 2003, by which the convertible notes were issued. The convertible notes are guaranteed by PPL and are convertible into PPL common stock.
The purpose of the consent solicitation and the proposed amendments is to modify the terms applicable to the convertible notes for accounting reasons. As a result of accounting rule changes expected to be issued in the fourth quarter of 2004 and effective for reporting periods ending after Dec. 15, 2004, the existing terms of the convertible notes that relate to their conversion into shares of PPL common stock would cause PPL to reflect the full dilutive effect of all such shares of common stock in PPL's computation of diluted earnings per share.
The accounting rule changes themselves do not change the underlying cash flows of PPL. However, given investors' valuation focus related to the diluted earnings per share calculation, PPL is seeking to modify the terms of the convertible notes to mitigate the dilutive earnings per share impact of these accounting rule changes. PPL believes that the proposed modifications are in the best interest of its investors, including the holders of the convertible notes.
The record date for the consent solicitation is Oct. 22, 2004. The consent solicitation will expire at 5 p.m., New York City time, on Tuesday, Nov. 9, 2004, unless extended by PPL and PPL Energy Supply (the "Expiration Time").
PPL Energy Supply is offering to pay $2.50 in cash for each $1,000 in principal amount of convertible notes with respect to which a valid consent is timely received and not validly revoked. This payment is subject to the terms and conditions of the consent solicitation, including the receipt by PPL and PPL Energy Supply of consents from the holders of at least a majority in aggregate principal amount of the convertible notes on or before the Expiration Time. PPL and PPL Energy Supply may terminate the consent solicitation at any time on or prior to the Expiration Time for any reason.
The complete terms and conditions of the consent solicitation are set forth in PPL Energy Supply's Consent Solicitation Statement dated Oct. 26, 2004, and the related materials. Information regarding the consent solicitation is also available on MCM CorporateWatch on Bloomberg page MCM7877 and on Telerate page 64152.
Morgan Stanley & Co. Incorporated is the solicitation agent for the consent solicitation. Questions relating to the terms of the consent solicitation or requests for assistance may be directed to Morgan Stanley & Co. Incorporated (telephone: toll-free at 800-624-1808 or collect at 212-761- 1941, attention: Francesco Cipollone). Requests for documentation may be directed to JPMorgan Chase Bank, the consent agent (telephone: Frank Ivins at 800-275-2048).
PPL Corporation, headquartered in Allentown, Pa., controls more than 12,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to nearly 5 million customers in Pennsylvania, the United Kingdom and Latin America.
PPL Energy Supply is the holding company for PPL Corporation's competitive energy businesses. Through its subsidiaries, PPL Energy Supply generates and markets power in the United States and delivers electricity abroad. Its main operating subsidiaries are PPL Generation, LLC, PPL EnergyPlus, LLC, and PPL Global, LLC.
More information concerning PPL and PPL Energy Supply is available at http://www.pplweb.com/.
SOURCE: PPL Corporation
CONTACT: Media, George Biechler, +1-610-774-5997, or Financial, Tim
Paukovits, +1-610-774-4124, both of PPL Corporation; or Morgan Stanley,
Consent Solicitation Agent, 800-624-1808, or Francesco Cipollone, collect,
+1-212-761-1941, for PPL Corporation