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Firm supports Allegheny's attempt to sell part of utility

February 21, 2003|by JULIE E. GREENE

julieg@herald-mail.com

An independent proxy advisory firm is supporting Allegheny Energy Inc.'s efforts to have the option of selling part ownership of the utility, Allegheny officials announced Thursday.

Institutional Shareholder Services has recommended that Allegheny's shareholders vote to allow the company to change its charter to eliminate a certain shareholder privilege called pre-emptive rights, according to Institutional Shareholder Services' Feb. 13 report.

Pre-emptive rights allow shareholders to pre-empt or prevent the private sale of company stock to anyone else without first giving shareholders the right to buy that stock under the same terms and conditions.

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On Jan. 8, Allegheny filed a request with the U.S. Securities and Exchange Commission to seek the elimination of pre-emptive rights because they impeded efforts of several well-known firms interested in investing in Allegheny or buying part ownership of the company, Allegheny spokeswoman Cynthia Shoop has said.

This is another attempt to raise money as company officials seek various financing options and try to avoid a possible bankruptcy filing.

A special meeting for Allegheny stockholders to consider the proposal to eliminate pre-emptive rights is set for March 7 in New York City.

Institutional Shareholder Services' Web site states the company is the world's leading provider of proxy voting and corporate governance services.

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