NEW YORK, Jan 5: Enron Corp, the bankrupt energy trading giant, is unlikely to need the whole of a $1.5 billion loan financing package approved last month, according to people familiar with the company’s plans on Friday.

Enron, which filed for Chapter 11 bankruptcy protection on Dec. 2 in the largest US bankruptcy ever, won commitments from J.P. Morgan Chase & Co. and Citicorp for the debtor in possession” loan package a month ago.

The package, approved by a US bankruptcy court in New York last month, was to be used to fund operations for the Houston-based company while it reorganizes.

While Enron was eligible to use $250 million of the DIP funds immediately, it has had sufficient liquidity to fund its operations and hasn’t used any to date, the sources said.

Now Enron is considering asking lenders for a substantial cut in the DIP credit line, perhaps by as much as $500 million, since this type of funding costs money whether it is used or not, these people said.

There’s a real possibility that the size of the DIP funding will be less, said one person with knowledge of the situation.

This person said a final decision on the extent of the funding requirements will likely be made after Jan. 10, when Enron is hoping to auction off a controlling stake in its energy trading operations to a financial backer. The quality of any offer will have a bearing on Enron’s financial condition and need for DIP financing.—Reuters