Enron creditors evaluate assets

By
Tuesday, July 30, 2002

Creditors of bankrupt US power company Enron are visiting subsidiaries in Brazil and Bolivia to evaluate the creation of a regional holding company, to be known as OpCo, according to Gazeta Mercantil.

Interim Enron CEO Steve Cooper outlined OpCo plans in May this year.

Enron creditors are contemplating keeping assets in natural gas transport companies, electric power distribution companies, and thermoelectric generation plants. Other assets, such as natural gas distribution companies, will be sold, as they are not considered core competencies.

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The Brazilian assets of Enron are estimated to be worth around US$3bn. The largest single asset is power distributor Elektro, which covers 223 municipalities in Sao Paulo state and five in Mato Grosso do Sul state, and billed 1.8bn reais in 2001.

Orlando Gonzalez, president of Enron South America, said the creditors are evaluating market prices of the assets, and whether to accept operating control of the regional OpCo, as part of a due diligence study.

Enron owns the 480MW Cuiaba Integrated Project in Mato Grosso state. The Cuiaba I plant is fully commissioned on diesel fuel and capable of producing 450MW. Gas availability at the plant is expected in 3Q02 at which time commissioning on gas will be performed.

Enron also owns two thermoelectric plants in Rio de Janeiro state: 380MW Eletrobolt merchant plant - already completed - and 480MW Riogen, where construction has been halted. Some US$115mn has been invested to date, but US$250mn is still required.

"The basic project is ready and the turbines have been contracted from [Japan's] Mitsubishi," Gonzalez said.

Enron owns 3% of the Brazilian section of the Bolivia-Brazil pipeline and 29% of the Bolivian section.

Creditors wants to sell natural gas holding company Gaspart, which owns shares in seven natural gas distributors across Brazil delivering about 95 million cubic meters of gas a day.

The creditors continue to negotiate the sale of Enron's shares in Rio de Janeiro gas distributors CEG (25.4%) and CEG-Rio (33.8%) to Brazil's federal energy company Petrobras. These talks began in 2001 but were never completed.

In Bolivia, Enron also owns hydrocarbon transport company Transredes, which has approximately 3,000km of natural gas pipelines and 2,500km of oil/liquid pipelines.