V2, PENNICHUCK:?
25 WALNUT STREET
PO BOX 428
NASHUA, NH 03061-0428
(603) 882-5191
FAX (603) 913-2305
WWW.PENNICHUCK.COM
March 2, 2022
Mr. Steven A. Bolton
Corporation Counsel
City of Nashua
229 Main Street
Nashua, NH 03060
Re: Pennichuck East Utility, Inc. - Request for Approval of Loan and Grant from the
Drinking Water and Groundwater Trust Fund
Dear Attorney Bolton:
Introduction. As you know, the City of Nashua, New Hampshire (the “City”’) is the sole
corporate shareholder of Pennichuck Corporation (““Pennichuck”). The City has been the sole
shareholder since the acquisition of Pennichuck on January 25, 2012.
The purpose of this letter is to request that the City, acting in its capacity as sole shareholder,
approve resolutions authorizing Pennichuck’s regulated public water utility subsidiary,
Pennichuck East Utility, Inc. (‘PEU”), to enter into a term loan with, and to accept a grant from,
the Drinking Water and Groundwater Trust Fund (“DWGTF”).
Background. As part of the City’s acquisition of Pennichuck, in accordance with special
legislation enacted by the State Legislature, and as unanimously approved by the Mayor and Board
of Aldermen on January 11, 2011, the corporate structure of Pennichuck and its utility subsidiaries
was retained. This corporate structure was retained for several reasons. First, the Mayor and
Board of Aldermen desired to maintain stability and continuity for customers and employees of the
Pennichuck utilities and the communities they serve. Second, retaining the corporate structure
provided continuity for the existing relationships with regulatory agencies and financial/banking
partners. Third, the Mayor and Board of Aldermen unanimously agreed that the corporate
structure would encourage business-smart decisions and rely upon well-established governance
principles of corporate law, pursuant to Pennichuck’s Articles of Incorporation and its by-laws.
Shareholder Approval of Borrowings Required. Under Article IX of Pennichuck’s Articles of
Incorporation, the City, acting in its capacity as Pennichuck’s sole shareholder, must approve:
“(3) any action to (A) create, incur or assume any indebtedness for borrowed
money or guarantee any such indebtedness of any person, (B) issue or sell
any debt securities or warrants or other rights to acquire any debt securities
of the [Pennichuck] Corporation or any of its Subsidiaries, or (C) guarantee
any debt securities of any person.”
