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Enron announced in court Friday, January 11, that it had selected UBS Warburg’s bid for its wholesale commodity trading business. Many details concerning the sale remain to be resolved through the bankruptcy court process. Importantly for Haynes and Boone’s energy clients, there are many other Enron assets remaining on the auction block. Following its bankruptcy filing on December 2, 2001, Enron has announced an intent to sell certain major assets, and to sell between $4 and $8 billion of non-core diversified energy assets. In addition to the sale of EnronOnline, the major completed and anticipated sales include: Enron’s 65% interest in its Dabhol power plant in India held by Enron Oil & Gas India Ltd. Wessex Water, the regional UK utility owned by Azurix Corp. 160 MW Wind power generating plant in West Texas by Enron Wind to American Electric Power for $175 million closed December, 2001. Sundance power generating plant in Canada by Enron Canada Power Corp. to a partnership between Alta Gas Service and TransCanada Pipelines closed for $135 million December 2001. Portland General Electric power utility in Oregon under contract for $1.8 billion to Northwest Natural Gas Co. announced in October. Enron LNG Power Atlantic to an undisclosed buyer for $266 million. Spanish power plant, Diario Economico 1,200 MW combined-cycle gas plant at Arcos de la Frontera, near southern port Cadiz, Spain. 50% participation in South Korean gas and power joint venture, SK – Enron. Philippine power plants (total 200+ MW) to be sold by Enron Power Corp (Philippines) to Philippine government. Also, there are numerous Enron sponsored off-balance sheet vehicles that invested in power, water and energy related assets. Some of these off-balance sheet vehicles issued debt which went into default as a result of Enron’s bankruptcy. It is likely that these vehicles will seek to sell assets to satisfy the defaulted indebtedness. Enron noted in court papers, filed on Dec. 21, that offers continue to come in for non-debtor assets, including offers to purchase turbines, power plant projects, emission credits issued by California air districts and oil and gas exploration and development assets. As of January 14, 2002, Enron and approximately 30 of its subsidiaries had filed for protection under the bankruptcy laws in US as well as England, Canada, Japan and Thailand. Enron has over 3,500 other subsidiaries and affiliates, including the off-balance sheet vehicles, that have not filed for bankruptcy protection. Purchasing assets from Enron, or a bankrupt or non-bankrupt affiliate, create several potential benefits and pitfalls for our clients which would not be present in asset acquisitions outside of bankruptcy.

 

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