February 22, 2002 Friday
Enron haggles through Asian asset liquidation
Reuters Singapore , 21-02-2002
Enron's Dabhol Power Co in India is not its only Asian asset going through a drawn-out sales process as the once mighty energy trader tries to strike deals with creditors and bidders across the region.
Australian electricity players are still wrangling over forward contracts left open when Enron closed the doors of its energy trading operations late last year.
Fewer than half of the 37 counter parties have settled so far, said a spokesman for the court-appointed administrator of the Enron's Australian company.
"They're still working through them, but there is a likelihood that there will have to be court action if they are unable to come to a resolution," he said.
Enron made a push into Asia in the 1990s as markets began eyeing privatisation and deregulation as a way to raise efficiency, expand capacity and lighten government debt.
But when Enron in December filed for the largest bankruptcy in US history, it began looking for buyers for its assets and to unwind its trading positions.
Lenders to the collapsed $2.9 billion Dabhol power project, Enron's largest investment in Asia, met in Singapore on Thursday to thrash out a plan to sell the 85 per cent of the project in foreign hands. Enron holds 65 per cent.
Bankers and analysts said the scores of creditors looking for their share of the leftovers of Enron's Asian businesses will complicate the company's retreat from the region.
The sale of Enron's 50 per cent stake in SK-Enron, a South Korean gas distributor created in partnership with SK Corp, could take several months as creditors clamour to be repaid, a banker involved in the deal said.
"That's going to be the problem in a lot of the countries they're exiting," he said.
SLOW PROGRESS
Sichuan Jialing Electric Power Co in China said it is in talks with foreign investors to sell Enron's majority share of the a 284 megawatt (MW) plant in Chengdu, but progress was slow because Enron's assets had been frozen by the courts.
Enron also partnered with PetroChina, China's top oil firm, to build a 760-kilometer (470 mile) gas pipeline from southwestern Chongqing city and the central city of Wuhan. PetroChina declined to say whether it was looking for other partners to construct the pipeline.
Philippine state-owned National Power Corp (Napocor) expected within two weeks to come up with a plan to buy out the two power purchase agreements it signed with Enron in the 1990s.
"We're trying to evaluate what those contracts would be worth as of today," said Power Sector Assets and Liabilities Management Corp (PSALM) president Edgardo del Fonso said.
The Philippines is in the process of privatising its state-owned power industry, including Napocor. Enron owns two diesel-fired power plants in the Philippines with a combined capacity of over 200 MW, Del Fonso said.
The company has two supply contracts, one with about one and a half years remaining on it while the other has about seven years left, Del Fonso said.
He said together the contracts were worth "in the ballpark of $200 million."
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