
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, November 11, 1993                   TAG: 9311110080
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

ROANOKE GAS SELLS STOCK PLAN

Roanoke Gas Co. has received regulatory approval for a program under which customers can purchase the company's common stock. The utility began mailing notices of the stock's availability in this month's gas bills.

A blue card mailed along with November bills explains that the program is part of the company's dividend reinvestment and stock purchase plan.

The notice said the plan is designed "to provide our customers with a convenient and economical means of purchasing shares of Roanoke Gas" stock without paying brokerage commissions or service charges.

Customers interested in the stock-purchase plan are invited to mail in the postage-paid card requesting a copy of the company's stock prospectus and other materials explaining the program.

The mailing means Roanoke Gas received permission from the State Corporation Commission and the federal Securities Exchange Commission to operate the plan. Under its provisions, customers initially would invest at least $100, buying about three shares at the current sale price of $32.50 per share.

After the initial purchase, customers would be able to invest as little as $25 per month to buy additional shares.

The plan also will reinvest dividends from the stock in the purchase of additional Roanoke Gas shares. The company's current dividend is $2 annually, a return of roughly 6.25 percent on an investment in the stock.

First Union National Bank of North Carolina will be the stock sales agent, and customers will be able to make purchases through automatic checking account drafts. Customers can either receive stock certificates personally or leave them with the bank for safekeeping, the company said.

John Williamson III, vice president for rates and finance, said the company expects between 1.5 percent and 3.5 percent of its 53,000 customers - roughly 1,600 investors - to participate in the plan. If that projection - based on similar plans offered by other utilities around the country - proves true, it would nearly triple the company's current stockholder base of 900 investors.

Roanoke Gas hopes selling the common stock to gas customers will raise up to $750,000 a year for its construction budget and reinforce customer good will.

The company has an annual construction budget of $3.5 million, which requires borrowing $1.5 million in outside funds to finance.

A stock offering bringing in $750,000 a year would meet its goal of paying for at least half its construction budget through stockholders' equity, with borrowing making up the rest.

by CNB