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September 2, 2004

Enron finalizes pipeline deal

Enron Corp. agreed to sell its CrossCountry Energy business to a venture of Southern UnionCo. and a General Electric Co. unit in a deal the companies valued at $2.45 billion. CrossCountry Energy holds Enron's interests in three domestic natural-gas pipelines that were one of the company?s most valuable assets when it filed its Chapter 11 bankruptcy case in early December 2001. Earlier posts on the spirited competition for these assets can be reviewed here and here.

The sale ? which is at a price that is $100 million more than the auction winner's initial offer ? remains subject to approval by the Enron Bankruptcy Court in New York on Sept. 9. The deal is expected to close by mid-December.

NuCoastal LLC, a company run by Texas billionaire and Coastal Corp. founder Oscar Wyatt Jr. offered $2.2 billion in May. In June, Southern Union and joint-venture partner GE Commercial Finance Energy Financial Services put forward a rival offer of $2.35 billion. Both offers included the assumption of about $430 million in debt.

The CrossCountry sale is a key part of Enron's ?going concern liquidation? reorganization plan, which also proposes to sell Enron?s interest in Portland General Electric, its Pacific Northwest utility, to an investment group backed by Texas Pacific Group. That deal is for $1.25 billion in cash and $1.1 billion in assumed debt.

Posted by Tom at September 2, 2004 2:31 PM |


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