• Parties to continue settlement discussions
MERRIMACK, NH, May 15, 2007 -- Pennichuck Corporation (NASDAQ: PNNW) and the City of Nashua, New Hampshire today announced that they have agreed to seek a 61-day extension, to July 16, 2007, of their initial agreement to postpone the eminent domain proceedings pending before the New Hampshire Public Utilities Commission (the "NHPUC"). The initial 120-day postponement commenced on January 16, 2007 and was scheduled to end on May 16, 2007. In the proceedings before the NHPUC, Nashua is seeking NHPUC approval to acquire by eminent domain all or a significant portion of the assets of Pennichuck Water Works, Inc., Pennichuck's principal subsidiary. Pennichuck Water provides potable water for domestic, industrial, commercial and fire protection service to customers in Nashua and other southern New Hampshire communities. The extension request is subject to NHPUC approval.
Pennichuck and Nashua are seeking the 61-day extension in order to continue engaging in confidential discussions regarding a possible comprehensive settlement of the eminent domain controversy, which began in 2002. A settlement could involve Nashua's acquisition of some or all of the assets of Pennichuck or one or more of its subsidiaries, or alternatively the shares of Pennichuck stock.
Pennichuck and Nashua are actively supporting a proposed New Hampshire statutory amendment that, if passed into law, would enable a municipality to own and operate a water utility entity in stock form. Without passage of this statutory amendment, it is unlikely that the parties will be able to craft a mutually acceptable settlement. The current legislative session is scheduled to end next month.
Commenting on these developments, Duane C. Montopoli, Pennichuck's President and Chief Executive Officer, said, "Pennichuck's Board of Directors has authorized me to join in seeking this extension of the postponement of the eminent domain proceedings because of our collective belief that it will facilitate settlement discussions between the parties. Nevertheless, I must again caution Pennichuck shareholders and bondholders that, in addition to passage of the statutory amendment, a comprehensive settlement would require the negotiation of many complex issues and, therefore, there can be no assurance that Nashua and Pennichuck will ultimately be able to reach a settlement agreement. Moreover, in addition to the approval of two-thirds of Nashua's Board of Aldermen, a definitive settlement agreement may also be subject to approval by the NHPUC and, depending on the terms of the settlement, Pennichuck shareholders."
Nashua Mayor, Bernard A. Streeter, added, "I believe a negotiated settlement is in the best interests of everyone including ratepayers and shareholders. The City's representatives, and the Board of Aldermen, are directing all efforts toward that end. We will continue to work cooperatively with Pennichuck to achieve this objective. However, I concur with Pennichuck President Montopoli that there still are many hurdles to clear before a settlement can be achieved."
Pennichuck and Nashua do not intend to comment further on the status or substance of the settlement discussions until either a definitive agreement is entered into or the postponement of the eminent domain proceedings terminates.
Pennichuck Corporation is a holding company involved principally in the supply and distribution of potable water in southern and central New Hampshire through its three regulated water utilities. Its non-regulated, water-related activities include operations and maintenance contracts with municipalities and private entities in New Hampshire and Massachusetts. The Company's real estate operations are involved in the ownership, management and development of real estate in the greater Nashua, New Hampshire areas.
Pennichuck Corporation's common stock trades on the NASDAQ Stock Exchange under the symbol "PNNW". The Company's website is at www.pennichuck.com.
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