PEC says co-op 'not for sale'
San Marcos Local News
January 20, 2010
Pedernales Electric Cooperative’s (PEC) board of directors made it
clear Tuesday that the largest co-op in America is not for sale.
The board made the declaration after meeting in executive session to
discuss an offer made by New Jersey-based Quentin Capital Management
LLC to purchase PEC. Quentin Capital also made an offer to buy PEC in
2008.
“We remain committed to the position — as previously stated by the
Board on Sept. 15, 2008 — that this cooperative is not for sale,” said
PEC Board President and District 6 Director Larry Landaker.
The board directed staff to create a formal response to Quentin
Capital and to develop a policy for board consideration to address any
potential future offers. . . .
[Editors Note: See Terms of Rejected Offer Below.]
Major Texas, Georgia Coops
Reject Buyout Offers
The Coop Litigation News has recently become aware of an extremely interesting turn of events involving Rural Electric Coops.
A
substantial investor has made credible offers to "buyout" or purchase
for cash at least two major Coops lock, stock and proverbial barrel.
Both offers involve over $500 Million.
To quote Don Corleone from the Godfather these are seemingly "offers that [the Coops] can't refuse."
Reliable sources have told the Coop Litigation News that the terms of both of the offers are virtually identical:
- Pay 100 cents on the dollar to current and former members of the Coop for their capital credits.
- Assume and/or pay all outstanding debt of the Coop.
- Freeze electric rates for three years.
- After three years electric rates would be set by the state public utility commission.
- Not fire any rank and file employees absent good cause.
- Keep the current Coop board of directors.
- Keep
current management of the Coop. (Naturally incompetent or corrupt
managers like those indited or facing indictment would not be retained.)
We
understand both offers were backed by major institutional investors
with billions of dollars in assets willing to purchase these Coops in a
matter of months.
Such offers look to be one of those cliched "win win" situations:
- This would quickly infuse hundreds of millions of dollars into the local economies from out of state investors.
- Nationwide
the average Coop member has over $1,000 -- many have over $10,000 -- in
capital credits which they would receive in cash in a few months.
Money that it will take decades for the Coop members to receive under
existing Coop management -- if ever.
- The Coop would become a taxable entity adding millions of dollars to state and/or local budgets.
But for some unknown reason the Boards of Directors of both "Buyout
Targets" -- Cobb Electric in Georgia and Pedernales Electric in Texas
-- have rejected the offers.
Our investigation is ongoing and we'll report what we find, when we find out why the offers were rejected.
This issue is known to exist at two Coops: