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The company said it has no other choice but to issue debt and
was facing the prospect of a cash shortfall in the fourth quarter,
the quarter ending Aug. 31, even if it gets a lift from the U.S.
Treasury.
J.P. Morgan, which has been advising Enron on the debt front,
last week began talks with the banks.
``The issue is not whether we would issue debt. The issue is
when we issue debt,'' Enron Treasurer Ben Gilsan said.
Enron shares rose $1.07 to $13.50 and the company's 7.4 percent
notes maturing in 2006 were bid at 77 cents on the dollar, up from
the par value of 65 cents, according to Trace, the bond-price
reporting system of the Financial Industry Bond Analysis Group.
Govt Woes Fall on Enron
Enron's struggles help illustrate the fallout of the U.S. economic
slowdown on different companies.
The Houston company, a trader of natural gas, electricity and
other commodities, has been a star performer this year, up almost
200 percent since the start of the year.
The stock has been driven higher as investors piled into
energy shares and bid up shares of other natural gas and power
producers.
The stock has fallen underperforming the overall Dow Jones
industrial average by about 25 percent this year.
Govt Troubles Hit Energy Stocks, Hurt Financials
The stock price decline comes as investors continue to shun
banks and financial shares, moving assets into more secure sectors
such as energy.
The shares of J.P. Morgan Chase slipped 0.7 percent and
earnings fell short of Wall Street's expectations, the fourth
consecutive quarter of declines.
The other big banks, Citigroup and Bank of America, have
reported losses from soured investments. Enron has tumbled on
concerns that in addition to its own trouble, its deals with
partners such as the New Power Co. could face increased scrutiny
from regulators.
Meanwhile, Enron's woes also hurt shares of other natural gas
and power producers. Enron is the biggest energy trader in North
America, operating a fleet of power plants and trading space on
the nation's largest power and natural gas markets, the New York
Mercantile Exchange and Intercontinental Exchange, respectively.
Sempra Energy, the parent company of San Diego Gas & Electric,
dropped 36 cents to $11.30. Southern California Edison lost 25
cents to $12.50.
Some metals and mining shares were also down. Gold Resource
Corp., which mines in Indonesia, fell 28 cents to $1.70. Asarco,
the leading U.S. zinc and copper producer, gave up 27 cents to
$4.45.
Viacom Inc. shares fell 3.3 percent to $39.54 after the
studios for MTV, Nickelodeon and VH-1 said they would eliminate
162 jobs to cut costs. Last week, MTV said it would eliminate 78
jobs and cut 15 hours of programming a week. Viacom has taken a
hit as investors pared back on expensive growth stocks.
Shares of SanDisk, the largest maker of flash-memory
computer-disk cards used in digital cameras, digital music
players, and data, dropped $4.02, or 21 percent, to $15.64.
So far this year, 2,000 technology stocks have come down 50
percent or more.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Power Surge
Daily changes in Bloomberg rankings of analysts' estimates of
companies' 1) power generation earnings, 2) power sales, and 3)
power stock performance over the past four quarters. Source:
Bloomberg News
Enron Says Indian Court Allows Pwr Proj Enabling Stake Sale
11/01/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW DELHI -(Dow Jones)- Enron Corp.'s (ENE) Indian unit Dabhol Power
Company (DPC) said Tuesday the Bombay High Court rejected a petition by
the Maharashtra State Electricity Board to suspend the National
Thermal Power Corp. (Pursuant To The Foreign Investment Promotion
Policy, 1992) Ltd.'s (MNPT) stake sale in DPC.
Enron holds a controlling 65% stake in DPC. Its domestic business
unit, Enron India, holds a 32% stake in DPC and is the maximum gainer
on the stake sale, MSEB said.
Enron holds a controlling 65% stake in DPC.
DPC has come under fire because of the Maharashtra Electricity Regulatory
Commission's November 2000 decision to set electricity tariffs for
domestic consumers that are significantly higher than tariffs set for
industrial and commercial consumers.
The commission, which sets tariffs for Maharashtra State Electricity
Board, has capped electricity tariffs for domestic consumers at 6.51
rupees per unit while for industrial consumers the rate is just 2.44
rupees per unit.
Dabhol's power project is the single largest foreign investment in India.
The 740-megawatt plant sits in a special economic zone in the western
Indian state of Maharashtra.
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427;
himendra.kumar@dowjones.com -0- 11/01/01 01-48G
Enron's Indian Lender To Meet With Indian Govt Tue - Source
11/01/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW DELHI -(Dow Jones)- Enron Corp. (ENE) will Tuesday meet with a
representative of the country's federal finance ministry to discuss
its ongoing Dabhol power project in India, a source close to the
project told Dow Jones Newswires.
The meeting follows last Friday's meeting of lenders to DPC, of which
Morgan Stanley Dean Witter (DEW), Citibank NA (C), ABN Amro Rothschild
(ABN) and the State Bank of India (P.BSB.P) participated.
A spokesperson for Enron declined to confirm the meeting, and referred
all calls to Enron India, the country's largest foreign investor in the
project.
Indian government sources told Dow Jones Newswires that the company's
participation in the meeting, would serve as a sign that foreign
investors' confidence in the government's ability to clear pending
rhetoric on a range of issues including the Enron project, has been
restored.
The meeting follows Friday's meeting of DPC lenders in London, which was
criticized by a Indian official as too little too late, since the
conference was held hours after an Indian newspaper reported a
government plan to renegotiate the terms of the power purchase
agreement between DPC and the MSEB.
The MSEB is the Indian utility that agreed to take 60% of DPC's power.
Enron was forced to sell its stake in DPC after its huge international
debt and the cost of building the plant proved too much to bear.
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427;
himendra.kumar@dowjones.com -0- 11/01/01 01-49G
USA: UPDATE 1-Calif. regulators order refund on past sales.
By Nigel Hunt
11/01/2001
Reuters English News Service
(C) Reuters Limited 2001.
LOS ANGELES, Nov 1 (Reuters) - California's power grid operator said on
Monday it had found no reason to resist the Federal Energy Regulatory
Commission's order to refund $102 million to overcharged power users in
February.
But a consumer advocate who filed a complaint against the California
Independent System Operator (ISO) said FERC may not have all of the
figures.
"The money they wanted back from us didn't come from them. It came from
other people, at least we think so. So we are