A federal bankruptcy judge on Friday approved Enron Corp's plan to sell its most prized remaining assets.
During a hearing in New York, US Bankruptcy Judge Arthur Gonzalez signed off on the energy company's agreement to sell whole or part interest in three natural gas pipelines for US$2 billion to CCE Holdings LLC, a joint venture of Southern Union Co and GE Commercial Finance Energy Financial Services. CCE Holdings will also assume US$430 million in debt.
Enron chose the CCE offer last week in a closed-door auction, rejecting a slightly smaller offer from NuCoastal LLC, a company run by Texas billionaire and Coastal Corp founder Oscar Wyatt Jr. The deal is expected to close in December.
Also pending is a US$1.25 billion sale of Portland General Electric, Enron's Pacific Northwest utility, to a holding company backed by Texas Pacific Group, which also will assume US$1.1 billion in debt. Gonzalez approved that sale in July. But the deal, announced in November, is awaiting approval from Oregon regulators.
If both sales close as expected, the last remnant of the one-time energy giant that claimed more than US$100 billion in revenues in 2002 and pioneered trading operations beyond energy will be Prisma Energy International Inc. That will be a hodgepodge of pipeline and power assets in 14 foreign countries, mostly in Latin America. The Enron name will disappear.
Enron went bankrupt in December 2001 when revelations of hidden debt, inflated profits and accounting shenanigans melted its facade of success. Thousands of workers lost their jobs, and 31 individuals are either awaiting trial on or have pleaded guilty to criminal charges. Those awaiting trial include Enron founder and former chairman Kenneth Lay and former CEO Jeffrey Skilling. Both have pleaded innocent to charges that include fraud and conspiracy.
CrossCountry, Portland General and Prisma have never been part of Enron's bankruptcy.
Assuming the CrossCountry and Portland General sales close, Enron will distribute about US$12 billion to creditors -- 92 percent in cash and 8 percent in Prisma stock. If one or both of the sales fall through, Enron will keep whatever company doesn't sell and creditors will receive less cash and more stock in the multiple companies.
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