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GULF STATES UTILITIES ANNOUNCES USE OF BONDS FOR DIVIDEND ARREARAGES

GULF STATES UTILITIES ANNOUNCES USE OF BONDS FOR DIVIDEND ARREARAGES
 BEAUMONT, Texas, March 26 /PRNewswire/ -- Gulf States Utilities Co. (NYSE: GSU) said today it may use some of the proceeds from forthcoming first mortgage bond issues to pay all of its preference stock dividend arrearages and to redeem its outstanding preference stock.
 In a March 25 filing with the Securities and Exchange Commission, GSU said that, although the board of directors has taken no action, it is within its discretion to use a portion of the bond proceeds to pay about $86.6 million in preference stock arrearages (as of March 15) and to redeem the outstanding preference stock amounting to about $118.3 million as of March 15.
 A portion of the proceeds from the new bond offerings also may be used for additional refinancing of outstanding first mortgage bond issues. In January, the company refinanced about $283 million in higher cost first mortgage bonds with the proceeds from the sale of two first mortgage bond issues.
 Also in its filing, the company noted it previously had announced formation of a committee of outside members of its board of directors to study and report to the board concerning long-range business plans and alternatives and courses of action which would be in the long-term best interests of the company and its shareholders.
 GSU said the committee has been engaged in an ongoing process of considering the company's alternatives, which has included follow-up on previously-reported indications of possible merger interest from neighboring utilities. The company said it is now negotiating with respect to possible merger transactions.
 The company noted there can be no assurance that any transaction will result. Even if a merger were agreed to, the GSU filing states, it would be subject to numerous conditions, including many regulatory approvals, and there can be no assurance that a transaction would be consummated.
 GSU reiterated its policy of not commenting on rumors, market activity, merger or acquisition possibilities or negotiations unless and until required by law.
 -0- 3/26/92
 /CONTACT: Kim R. McMurray of GSU, 409-839-2890/
 (GSU) CO: Gulf States Utilities Co. ST: Texas IN: UTI SU:


TQ -- NY038 -- 1907 03/26/92 11:05 EST
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Publication:PR Newswire
Date:Mar 26, 1992
Words:366
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