WASHINGTON, Dec 13: Bankrupt energy firm Enron has unveiled to creditors a plan to sell up to six billion dollars of assets and reorganize around core operations, in a bid to restructure its way out of bankruptcy court within a year, the Wall Street Journal reported, citing chief financial officer Jeffrey McMahon.
Enron will also seek to sell control of its energy trading business that some of Enron’s bankers have considered bidding for, the newspaper said, citing comments by McMahon at a meeting with creditors in New York.
Enron also gave the creditors the first detailed breakdown of its overall debt.
As of November 16, it had total debts of $39.71 billion, the newspaper quoted the company as saying.
Of this, roughly $22 billion is in the form of bank debt, commodity-transaction financing, bonds and other public securities.
The remainder is made up of roughly $7 billion in bonds and bank debt linked to other assets in special partnerships, and an additional $10.7 billion in “project finance,” typically money lent to build power plants or oil refineries.
The creditors meeting was organized by the Office of the US Trustee.
The trustee yesterday appointed 15 firms to a committee, including JP Morgan Chase Co, Citigroup Inc and Credit Suisse First Boston, which will be instrumental in negotiating with the company and its advisers over the reorganization plan.
McMahon said Enron hopes to resurrect its trading business by selling it to a third party. Among the firms that have been contemplating a deal are UBS AG, Citigroup and JP Morgan Chase, according to people involved in the matter.
Enron’s share in the potential new trading venture would probably be a minority one that would entitle it to “residual cash flow,” McMahon was quoted as saying by the Journal.
McMahon said the company also would like to sell its water and wind turbine businesses and other assets, which he said could yield between four and six billion dollars.
What would remain would be energy assets that would form the core of a new Enron, including pipeline and power assets, exploration and production operations, and various services related to gas storage and power stations.—AFP