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Thursday, February 16, 2012

Pennichuck $10 million line of credit approved by Nashua officials

NASHUA – Aldermen have allowed Pennichuck Corp. to open a $10 million line of credit, a source of money the company had prior to being acquired by the city of Nashua but needed again with new ownership.

On Tuesday, aldermen approved the company starting a revolving line of credit to finance capital needs when necessary.

When Pennichuck was in private hands, it had a $12 million line of credit, but had to close the account, with no outstanding balance, upon the sale of the company, according to John Patenaude, interim CEO of Pennichuck.

Pennichuck can now open a $10 million line of credit with Bank of America at an interest rate of roughly 3.6 percent, Patenaude told an aldermanic committee early this month. The company might tap the credit at the end of the year, he said.

The aldermanic vote illustrated the steps the company now has to take with Nashua as its sole shareholder, rather than when it was a entity answering to a private board of directors and numerous shareholders.

A board of directors appointed by the mayor and city aldermen now oversees the day-to-day operations of Pennichuck and its three water utilities. That board approved the line of credit at its first meeting last month.

But the city also needs to approve any major fiscal transaction for the company, thus Pennichuck also had to seek aldermanic approval for the credit line.