[Federal Register Volume 70, Number 65 (Wednesday, April 6, 2005)]
[Notices]
[Pages 17482-17483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1552]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27954; 70-10285]


PNM Resources, Inc.; Filings Under the Public Utility Holding 
Company Act of 1935, as Amended (``Act'')

March 30, 2005.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by April 25, 2005, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts or law that 
are disputed. A person who so requests will be notified of any hearing, 
if ordered, and will receive a copy of any notice or order issued in 
the matter. After April 25, 2005, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

[[Page 17483]]

Notice of Proposal To Amend Restated Certificate of Incorporation; 
Order Authorizing the Solicitation of Proxies

    PNM Resources, Inc. (``PNM Resources''), Alvarado Square, 
Albuquerque, NM 87158, a registered holding company, has filed an 
application-declaration (``Application'') under sections 6(a), 7, 8, 
9(a), 10, 11, and 12(e) of the Act and rules 51, 54 and 62-65 under the 
Act.
    PNM Resources became an exempt public utility holding company on 
December 31, 2001, and conducts its operations consistent with the 
order of the New Mexico Public Regulation Commission which authorized 
the holding company structure. Except for certain corporate support 
services provided to its subsidiaries at cost pursuant to that order, 
PNM Resources conducts no business operations other than as a holding 
company. PNMR Services Company (``Services'') is a subsidiary service 
company, which provides services at cost to the subsidiaries of PNM 
Resources. PNM Resources filed a notice of registration under the Act 
on December 30, 2004, and transferred its service functions to Services 
on January 1, 2005.
    PNM Resources' only public utility company subsidiary is Public 
Service Company of New Mexico (``PNM''), a New Mexico corporation. PNM 
is an electric and gas public utility company. It is engaged in the 
generation, transmission, and distribution of electric energy at retail 
in the State of New Mexico and makes sales for resale (``wholesale'' 
sales) of electricity in interstate commerce. PNM is also engaged in 
the distribution of natural gas in the State of New Mexico, which 
includes some off-system wholesale sales of natural gas.
    PNM Resources proposes to acquire all of the outstanding voting 
securities of TNP Enterprises, Inc. (``TNP Enterprises''), a public 
utility holding company claiming exemption by rule 2 under the Act (the 
acquisition is referred to hereafter as the ``Transaction''). TNP 
Enterprises has subsidiary electric utility operations in Texas and New 
Mexico conducted by Texas-New Mexico Power Company (``TNMP''), its 
public utility subsidiary. In connection with the Transaction, PNM 
Resources is requesting authorization to amend its Restated Articles of 
Incorporation (``Restated Articles'') and to solicit proxies from its 
shareholders to approve such amendment at its annual meeting of 
shareholders to be held on May 17, 2005.
    In order to finance a portion of the acquisition cost, PNM 
Resources will issue and sell 4,000,000 units of its 6.625% Hybrid 
Income Term Security Units (the ``Units'') to Cascade Investment, 
L.L.C. (``Cascade''), a limited liability company formed under the laws 
of the State of Washington, in consideration for $100,000,000. Each 
Unit will have a stated amount of $25.00. The proceeds of the sale of 
the Units will be used by PNM Resources to finance a portion of the 
cash consideration paid in the Transaction and for refinancing the debt 
and preferred securities of TNP Enterprises. The Units will be sold 
pursuant to the terms of a Unit Purchase Agreement, dated August 13, 
2004, between PNM Resources and Cascade (the ``UPA''). Each Unit 
consists of two components, (i) a forward purchase contract which 
obligates the holder (Cascade or an affiliate of Cascade) to purchase 
and PNM Resources to sell, no later than February 16, May 16, August 16 
or November 16 first following the third anniversary of the issuance of 
the Units, a specified number of shares of PNM Resources common stock 
(``Common Shares'') (subject to anti-dilution adjustments), and (ii) a 
\1/40\, or 2.5%, ownership interest in one of PNM Resources' senior 
notes (``Senior Notes'') (A) with a principal amount of $1,000, (B) 
with an initial maturity date of February 16, May 16, August 16, or 
November 16 next preceding the fifth anniversary date of the initial 
issuance of the Units, and (C) bearing interest at a rate per annum 
(not to exceed 6.625%) to be set at the market at or near the date of 
issuance.
    Under the UPA, Cascade (or any Cascade affiliate holder of the 
Units) shall have the right to purchase PNM Resources' Convertible 
Preferred Stock, Series A (the ``Preferred Shares'') in lieu of Common 
Shares. Each Preferred Share is convertible at any time, at the option 
of the holder, into ten Common Shares, subject to adjustment for stock 
splits, combinations, reclassifications, mergers, consolidations, sales 
of assets and other transactions. In accordance with the Cascade Order, 
Cascade intends to exercise its right to purchase Preferred Shares in 
lieu of Common Shares in order to maintain its ownership of PNM 
Resources' outstanding voting securities at less than 10%.
    Also under the UPA, PNM Resources is obligated to seek shareholder 
approval for an amendment to the Restated Articles that would confer 
upon holders of the Preferred Shares certain voting rights in addition 
to those voting rights conferred by law. Specifically, under the 
Restated Articles, as proposed to be amended, the Preferred Shares, 
voting as a single class with PNM Resources' common stock, will be 
entitled to the number of votes to which the shares of common stock 
into which the Preferred Shares are convertible are entitled to vote on 
all matters required to be submitted to a vote of common stockholders, 
other than the right to vote in the election of directors, provided 
that such voting rights are exercisable by the holders of Preferred 
Shares only if approved and permitted by the Commission.
    The proposed amendment to PNM Resources' Restated Articles to 
confer the additional (i.e., non-statutory) voting rights on the 
Preferred Shares requires the approval of the common stockholders of 
PNM Resources.\1\ PNM Resources intends to seek such approval at its 
annual meeting to be held on May 17, 2005. Accordingly, PNM Resources 
requests that its proposal to solicit proxies for shareholder approval 
of the proposed amendment be permitted to become effective immediately 
under rule 62(d).
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    \1\ PNM Resources' obligation to issue, and Cascade's obligation 
to purchase, the Units are not dependent on shareholder approval of 
the amendment.
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    It appears to the Commission that PNM Resources' Application 
regarding the proposed solicitation of proxies should be permitted to 
become effective immediately under rule 62(d).
    It is ordered, under rule 62 under the Act, that the portion of the 
Application regarding the proposed solicitation of proxies from PNM 
Resources' shareholders become effective immediately, subject to the 
terms and conditions contained in rule 24 under the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1552 Filed 4-5-05; 8:45 am]
BILLING CODE 8010-01-P