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Enron Mail |
WRAP: Dynegy Terminates Troubled Merger Pact With Enron
Dow Jones News Service, 11/28/01 Enron's Fall To Spark Volatility On Pwr, Natural Gas Mkts Dow Jones Energy Service, 11/28/01 Merger Collapse, Weak Fed Report, Rattle Investors at Midafternoon Dow Jones Business News, 11/28/01 Enron To Temporarily Suspend Noncore Payments Dow Jones News Service, 11/28/01 Energy Markets Seen Surviving Enron's Woes, But Changed Dow Jones Energy Service, 11/28/01 UK: Enron - a pioneer of Europe's new power markets. Reuters English News Service, 11/28/01 USA: WRAPUP 2-Enron near collapse after Dynegy pulls out. Reuters English News Service, 11/28/01 USA: US energy regulator says "monitoring" Enron situation. Reuters English News Service, 11/28/01 USA: Dynegy says no longer trading with Enron. Reuters English News Service, 11/28/01 USA: Enron seeks to preserve value after Dynegy pullout. Reuters English News Service, 11/28/01 USA: UPDATE 1-EnronOnline trading system shuts down. Reuters English News Service, 11/28/01 USA: UPDATE 1-Key US lawmaker doesn't see govt solution on Enron. Reuters English News Service, 11/28/01 UK: UK power prices rally, Enron news dims trade. Reuters English News Service, 11/28/01 USA: NYMEX natgas tumbles late on bearish AGA data. Reuters English News Service, 11/28/01 USA: Citigroup, J.P. Morgan off on Enron exposure. Reuters English News Service, 11/28/01 STOCKWATCH Enron down 85 pct as Dynegy walks out of merger deal AFX News, 11/28/01 Enron temporarily suspends all payments except those needed to maintain ops AFX News, 11/28/01 CalPERS May Discuss Enron, Action Against Co. In Dec Dow Jones Energy Service, 11/28/01 Dynegy calls off $8.4 billion takeover of Enron after credit downgrade Associated Press Newswires, 11/28/01 Dynegy Terminates Merger With Enron; Conference Call Scheduled for 12:30 CS= T, 1:30 p.m. EST Business Wire, 11/28/01 Dynegy Pull out of Enron Purchase; Credit Ratings Cut (Update6) Bloomberg, 11/28/01 Enron's Online Trading Unit Has Stopped, Traders Say (Update2) Bloomberg, 11/28/01 Enron's 401(k) Plan Was Set Up for Fall: David Wilson (Update1) Bloomberg, 11/28/01 Enron's Credit Rating Cut to Junk by S&P and Moody's (Update4) Bloomberg, 11/28/01 Enron Expected to Sell Portland Utility to Northwest Natural Bloomberg, 11/28/01 Sempra Energy Interested in Buying Some Enron Assets (Update2) Bloomberg, 11/28/01 Enron Office Tower Project in Limbo After Dynegy Ends Purchase Bloomberg, 11/28/01 WRAP: Dynegy Terminates Troubled Merger Pact With Enron 11/28/2001 Dow Jones News Service (Copyright © 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- Dynegy Inc. (DYN) terminated its troubled merger agre= ement with Enron Corp. (ENE), backing away from the deal despite frantic la= st-minute attempts by both sides to save it.=20 Dynegy Wednesday cited Enron's breaches of representations, warranties, con= venants and agreements, including the material adverse change provision. The announcement came after Standard & Poor's cut the beleaguered energy tr= ader's debt rating to B-minus, essentially rendering it to junk status.=20 The downgrade triggered financial covenants and raised the possibility that= Enron will be forced to file for protection under Chapter 11 of the federa= l bankruptcy code. That could be a fatal blow for Enron, which needs huge s= ums of cheap money to keep its trading operations alive.=20 Standard & Poor's lowered its long-term rating on Enron to B-minus from tri= ple-B-minus, citing fears that Dynegy would abandon its proposed purchase o= f Enron.=20 The collapse of the Dynegy purchase would create enormous pressure on Enron= 's credit profile because of Enron's limited access to capital at a time wh= en extensive debt restructuring is necessary, S&P said.=20 "While it is regrettable to see a leading industry player in difficulties, = this doesn't reflect a failure for the energy merchant business," Dynegy sa= id in announcing its decision.=20 However, Dynegy said its energy delivery network and core businesses are so= lid, and the company and its industry peers are ready to absorb any added v= olatility in the energy market as the result of the potential loss of Enron= .=20 In afternoon trading on the New York Stock Exchange, Enron shares were down= $2.91, or 71%, to $1.20. Dynegy, meanwhile, was down $4.08, or 10%, at $36= .81, also on the Big Board.=20 Top executives of Enron and Dynegy had tried to salvage a deal to combine t= he two energy-trading companies amid growing signs that Enron faced cash-fl= ow problems as a result of a sharp downturn in its core trading business.= =20 Talks between Enron and Dynegy began in earnest over the weekend to cut the= price of the all-stock transaction after Enron's share price had plummeted= in the wake of disclosures that its future earnings wouldn't be as high as= originally anticipated. Last month Dynegy agreed to buy Enron after the em= ergence of damaging revelations concerning a series of deals that allowed E= nron executives to profit personally at the expense of the company and its = shareholders. Those deals are now the subject of a Securities and Exchange = Commission investigation.=20 Citing a person familiar with the situation, The Wall Street Journal said W= ednesday that Enron's board late Tuesday had informally agreed to a new sha= re-exchange ratio of 0.12 shares of Dynegy for each Enron share tendered, d= own more than 50% from the original offer of 0.2685 Dynegy share for each E= nron share.=20 That latest proposed share-exchange ratio valued Enron at $4.91 a share, or= a total of $4.17 billion. That would compare with the original value of $1= 0.98 a share, or $9.33 billion. In exchange for reducing the purchase price= , some members of the Enron team were insisting on more control over the me= rged company. Dynegy also was considering an additional $250 million cash i= nvestment in Enron. Dynegy, together with ChevronTexaco Inc. (CVX), has alr= eady injected $1.5 billion into Enron in an effort to stabilize the company= .=20 While struggling to keep the planned merger alive, Enron also has been seek= ing to extend the maturity dates of some of its borrowings. Enron has a tot= al of about $13 billion of debt, of which about $9 billion comes due by the= end of next year. Last month Enron said in a filing with the SEC that a cu= t in its rating to below investment grade by any of the three major credit = rating agencies - along with a decline in its stock price below certain lev= els - would trigger the need to repay, refinance or cash collateralize faci= lities totaling $3.9 billion.=20 Dynegy said Wednesday that it will go through with its acquisition of Enron= natural gas pipeline unit Northern Natural, Omaha, Neb., and said it has e= xercised its right to acquire the unit's common shares.=20 ChevronTexaco, which owns 26% of Dynegy, contributed $1.5 billion to the pr= oposed Enron merger, and Dynegy used that money to acquire the pipeline uni= t.=20 Northern Natural, which owns and operates 16,500 miles of interstate natura= l gas pipeline spanning from the Permian Basin of Texas to the Great Lakes,= has historically been a strong earnings contributor.=20 Dynegy said the unit will be a positive addition to Dynegy's own energy del= ivery network. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron's Fall To Spark Volatility On Pwr, Natural Gas Mkts 11/28/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) CALGARY -(Dow Jones)- The potential demise of energy marketing giant Enron = Corp. spells a drop in liquidity and increased volatility in electricity an= d natural gas markets across North America, analysts said Wednesday.=20 "There will be an impact on liquidity here in Canada and everywhere because= Enron accounted for such a huge volume of trades," Denis Lawrence, with Fi= rstEnergy Capital Corp. said from Calgary. "Over time, the volumes will come back but it will take some time, in the o= rder of months," he predicted.=20 Stress levels in traders across the country vaulted with the news Wednesday= Dynegy Inc. backed out of a proposed US$4.17-billion merger with the belea= guered Enron, citing the energy trader's breach of representations, warrant= ies, convenants and agreements.=20 The move came on the back of Standard and Poor's downgrading Enron to junk = bond status Tuesday. Enron now faces filing for Chapter 11 bankruptcy prote= ction.=20 "This is totally bad for everyone," an East Coast trader said. "Anyone who = has positions with Enron is screwed, and little companies that put all of t= heir production with Enron could go under, too," the trader added.=20 Enron confirmed Wednesday in a press release it has temporarily suspended a= ll payments other than those necessary to maintain core operations.=20 Companies heavily invested in Enron face the possibility of becoming credit= risks themselves and being shunned by other marketing and trading entities= , further reducing liquidity on natural gas and power markets.=20 Energy majors like Aquila Inc. and Mirant had said at the beginning of Enro= n's troubleds that they were sticking by the corporation to keep the market= place from floundering. Representatives were not available for comments.=20 Just hours before Enron's lifeline was pulled, the Houston-based company sh= ut down its electronic trading platform which accounted for a quarter of No= rth America's natural gas and electricity trades.=20 The blank EnronOnline screen represents a loss of price discovery that is n= ot covered by alternative trading vehicles such as Atlanta-based Interconti= nentalExchange, or ICE, an electronic over-the-counter commodity exchange.= =20 "People are used to trading at a click of the mouse," one West Coast trader= said. "EnronOnLine always showed two-way trades, but ICE doesn't always sh= ow bid/offers because it just doesn't have the volumes."=20 Power traders in Alberta have a bit of an edge over other regions because o= f Alberta Watt Exchange, or Watt-Ex, has been supporting liquidity in the m= arket.=20 Watt-Ex, an independent on-line exchange for trading forward and real-time = contracts, gained more volumes last month after recruiting Dynegy Canada In= c. to maintain bids and offers on forward contracts traded on its system.= =20 And volumes on ICE have picked up substantially since Monday, other traders= said, giving credence to a more optimistic picture one analyst painted.=20 "Other companies will rise up and swallow Enron's share of volumes," Bill G= wazd, with Ziff Energy Group, said. "The world will blink but trading will = not stop."=20 -- By Dina O'Meara, Dow Jones Newswires; 403-531-2912 dina.omeara@dowjones.= com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Merger Collapse, Weak Fed Report, Rattle Investors at Midafternoon By Stacy Forster 11/28/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) The Wall Street Journal Online=20 Blue-chip stocks remained weak Wednesday, after a key survey of regional co= nditions from the Federal Reserve revealed that many sectors of the economy= continued to struggle. Investors also were rattled by news that Dynegy had pulled out of merger ta= lks with fellow energy-provider Enron.=20 In midafternoon trading, the Dow Jones Industrial Average was down 111 poin= ts to 9761, after flirting with a return to 10000 over the last two session= s. The industrials finished down 110.15 points, or 1.1%, at 9872.60 Tuesday= .=20 Meanwhile, the Nasdaq Composite Index lost 27.30 to 1908.70, after declinin= g 5.26 points to 1935.97 Tuesday.=20 Other indexes also fell. The Standard & Poor's 500-stock index shed 13.20 t= o 1136.40, the Russell 2000 Index declined 3 to 457.70, and the New York St= ock Exchange Composite Index dropped 4.90 to 579.70.=20 The Fed's so-called beige book indicated the economy remained soft in Octob= er and November. The survey showed "signs of further slowing outweighed sig= ns of recovery" in early November." The report rekindled speculation that t= he Fed will reduce interest rates again in an effort to stimulate the econo= my.=20 Investors already had been in the mood to take some money off the table, a = trend that started Tuesday after the Conference Board issued a disappointin= g report on consumer confidence, and Federal Reserve Gov. Laurence Meyer sa= id it is likely that U.S. economic output is continuing to shrink.=20 Several other key indicators are due out over the next couple of days, incl= uding the Commerce Department's report Friday on third-quarter gross domest= ic product.=20 Investors also were rattled Wednesday after Standard & Poor's Ratings Group= downgraded Enron's debt to junk status, a move that was immediately follow= ed by word that prospective suitor Dynegy had called off its agreement to m= erge with the struggling energy company.=20 Shares of Enron tumbled more than 71% before trading was halted on the Big = Board, and Dynegy lost 10%.=20 The news hit shares of other energy-trading companies, including El Paso Co= rp., which skidded 6.4%, and Williams Cos., which lost 5.6%.=20 Losses in key overseas markets helped to fuel early selling on Wall Street.= Frankfurt's DAX closed down 2.2%, while London's Financial Times-Stock Exc= hange 100-Share Index finished down 1.2%. Earlier, Tokyo's Nikkei 225 Stock= Average closed with loss of 3%, and Hong Kong's Hang Seng Index dropped 1.= 7%.=20 Among stocks to watch on Wall Street:=20 Shares of Dow components General Electric and Boeing were under pressure af= ter J.P. Morgan lowered its earnings estimates for the two companies. Share= s of General Electric lost 3.6%, while Boeing was down 2.9%.=20 Hewlett Packard gained 1.1% on reports that the company delayed notificatio= n of its acquisition of Compaq Computer to European regulators pending talk= s on possible competition problems; the European Union Commission expects t= he companies to request approval for the merger "soon." Shares of Compaq fe= ll 2.1%.=20 Shares of handset phone makers slid after Nokia said global sales of mobile= phones across the industry will only grow 10% to 15% in 2002 after falling= this year, weakening hopes of a recovery for the industry. ABN Amro trimme= d its views on Motorola following the forecast. Shares of Nokia fell 4.5%, = while Motorola lost 2%.=20 In major U.S. market action:=20 Stocks slid. On the Big Board, where 819 million shares traded, 1,824 stock= s fell and 1,258 rose. On the Nasdaq, 1.2 billion shares traded hands.=20 Bonds were mixed. The 10-year Treasury note gained 3/32; its yield, which m= oves inversely to its price, fell to 4.92%. The 30-year bond lost 4/32 to y= ield 5.34%.=20 The dollar fell. The dollar declined against the euro to 88.65 cents, down = from 88.64 cents, and weakened against the yen, falling to 123.14 yen, from= 123.96 yen late Tuesday in New York.=20 Copyright © 2001 Dow Jones & Company, Inc.=20 All Rights Reserved. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron To Temporarily Suspend Noncore Payments 11/28/2001 Dow Jones News Service (Copyright © 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- Enron Corp. (ENE) said it is taking actions to preser= ve value in its core trading and other energy businesses, in response to Dy= negy Inc.'s (DYN) decision to terminate a merger with Enron.=20 In a press release Wednesday, Enron said it has temporarily suspended all p= ayments other than those necessary to maintain core operations. Enron said it is reviewing Dynegy's actions earlier Wednesday, including an= assertion that Dynegy is entitled to exercise an option to purchase Enron'= s interest in Northern Natural Gas Co.=20 Earlier Wednesday afternoon, Dynegy terminated the merger agreement with En= ron, citing Enron's breaches of representations, warranties, convenants and= agreements, including the material adverse change provision in the merger = agreement. Also, Enron's long-term debt was downgraded to below investment = grade.=20 "Uncertainty during the past few weeks with respect to the merger has drama= tically lowered the market's confidence in Enron and its trading operations= . With Dynegy's termination of the merger and the ratings agency downgrades= , we are evaluating and exploring other options to protect our core energy = businesses," said Kenneth L. Lay, Enron chairman and chief executive in a s= tatement.=20 "To do this, we will work to retain the employees necessary to the continui= ng operations of our trading and other core energy businesses."=20 Dynegy had been in talks to acquire Enron in a stock swap that valued Enron= at $4.91 a share, or $4.17 billion in total, down 50% from Dynegy's origin= al offer on Nov. 9.=20 Dynegy also said it was still going through with its acquisition of Enron n= atural gas pipeline unit Northern Natural, Omaha, Neb., and said it exercis= ed its right to acquire the unit's common shares.=20 Shares of Enron, which had been halted on the New York Stock Exchange at $1= .19, traded recently at 77 cents, down $3.34, or 81.3%, on volume of 202.3 = million shares. Average daily volume is 23.3 million shares.=20 Shares of Dynegy traded recently at $36.10, down $4.79, or 11.8%, on New Yo= rk stock Exchange volume of 12.1 million shares. Average daily volume is 3.= 5 million shares.=20 -Stephen Lee; Dow Jones Newswires; 201-938-5400 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Energy Markets Seen Surviving Enron's Woes, But Changed By Mark Golden, John Edmiston and Andrew Dowell Of DOW JONES NEWSWIRES 11/28/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) NEW YORK -(Dow Jones)- The energy markets built by Enron Corp. (ENE) will s= urvive the company's troubles, but they won't emerge unscathed, traders and= analysts said Wednesday.=20 Energy companies have had weeks to adjust to serious concerns about the Hou= ston-based giant's creditworthiness, allowing a more or less orderly withdr= awal of Enron from the market before ratings agencies Wednesday downgraded = Enron's credit to junk-bond levels. Nevertheless, liquidity in the North American natural gas and electricity m= arkets is expected to suffer and credit requirements are likely to be tight= ened in general, creating difficulties for some energy traders.=20 "This doesn't spell the end of energy trading," said one trading manager fo= r an independent power producer. "The market is much bigger than Enron, and= that's why Enron fell. This does spell the spell the end of trading for co= mpanies that don't have a strong physical asset base for at least a year or= two as credit requirements are generally tightened,"=20 Moreover, small producers of natural gas or electricity that hedged their 2= 002 output with Enron earlier this year - when prices were much higher than= they are now - will suffer if Enron has trouble fulfilling those commitmen= ts.=20 Enron warned in a filing with the Securities and Exchange Commission last w= eek that its ability to continue as a going concern would be threatened if = its credit ratings were downgraded to noninvestment grade levels.=20 News of Enron's downgrade added 5 cents to 10 cents to natural gas futures = at the New York Mercantile Exchange, as traders covering short positions se= nt the December contract to $2.82 per million British thermal units, trader= s said.=20 Midwestern and Southeastern power prices were also said to have risen due t= o trading inefficiencies after Enron turned off its Internet-based trading = platform EnronOnline and higher gas prices.=20 Prices have in all those markets have since fallen, but the moves point to = the increased volatility and lessened efficiency some analysts and traders = expect should Enron exit the market entirely.=20 Kyle Cooper, energy analyst at Salomon Smith Barney, said traders will have= to present wider bid-offer spreads in order to get deals done in markets i= n which Enron provided critical liquidity.=20 "One less player, one less market, because of the illiquidity," Cooper said= .=20 At one time, Enron accounted for about a quarter of all trade in the North = American gas and power markets. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 UK: Enron - a pioneer of Europe's new power markets. By Stuart Penson 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, Nov 28 (Reuters) - U.S. group Enron , on the brink of collapse on W= ednesday, has been a pioneer of energy dealing in Europe and its demise wou= ld rob utilities across the continent of a key trading partner.=20 With a European staff of 5,000, offices in most major cities and a lavish h= eadquarters overlooking London's Buckingham Palace, Enron created the tradi= ng culture now embraced by previously sceptical European utilities as marke= ts open up to competition. Until recently, Enron had accounted for about 30 percent of German wholesal= e power trading. It was also a major player in UK gas and electricity and N= ordic power, and was driving forward a fledgling French power market.=20 "On average we are now doing around 200 deals a day with about 300 counterp= arties," Enron's director of continental power trading Gregor Baeumerich to= ld Reuters in an interview last month, days before the group was plunged in= to its current crisis.=20 Britain's forward gas market rallied on Wednesday as it emerged that a resc= ue deal from smaller rival Dynegy had unravelled and Enron looked to be ska= ting dangerously close to bankruptcy.=20 Enron's list of trading partners included major utilities such as German gi= ants E.ON and RWE and the UK's Innogy and British Energy=20 U.S. companies with trading desk in Europe, such as TXU , AEP , Dynegy and = Duke Energy , also traded with Enron.=20 The company's EnronOnline Internet trading platform, suspended earlier on W= ednesday, set the standard for online trading, offering a blueprint followe= d by utilities and brokers.=20 Enron did about 60 percent of its trade through the platform.=20 The group's presence in Europe is not confined to trading. The company has = around 4,000 megawatts of power generation, spanning Italy, Poland, Greece = and the UK where it owns one of the biggest plants at Teesside.=20 The company built a reputation for hard-nosed trading expertise in Europe's= previously pedestrian utilities industry and its approach seemed almost ev= angelical.=20 In the summer, flushed with confidence, the company placed a BMW sports car= in the lobby of its London office, a prize for employees successful in rec= ruiting fresh talent for the Enron cause. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: WRAPUP 2-Enron near collapse after Dynegy pulls out. By C. Bryson Hull 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, Nov 28 (Reuters) - Enron Corp. swooned at the edge of one of the b= iggest corporate collapses in U.S. history on Wednesday as its rescue by ri= val Dynegy Inc. blew apart.=20 Dynegy accused Enron of breaching the representations it made when a takeov= er agreement was negotiated on Nov. 9, invoking an escape clause that let i= t pull out of the all-stock deal valued at $9.3 billion at the time. Shares of Enron, recently ranked No. 7 on the Fortune 500 list of the bigge= st U.S. companies, had lost most of their value in the past three weeks, an= d all three major credit rating agencies had slashed their ratings on Enron= 's bonds to junk status by the time Dynegy made its announcement.=20 Enron's latest disaster marked another low in a stunning free-fall that beg= an innocently enough with the announcement of a $638 million quarterly loss= six weeks ago. Surprise disclosures, including the admission it overstated= earnings by almost $600 million since 1997 and kept huge debts off its bal= ance sheet, led investors to rapidly lose faith in a company valued at almo= st $80 billion a little more than a year ago.=20 On Wednesday, its market value was less than $500 million.=20 In response to Dynegy's announcements and credit rating downgrades, Enron s= aid it will temporary suspend all payments other than those necessary to ma= intain its core operations.=20 Kenneth L. Lay, Enron's chairman and chief executive, said the company was = evaluating and exploring other options to protect its core energy businesse= s.=20 The loss of Enron's investment-grade credit rating forces some $3.9 billion= in debts to come due immediately, a major problem for a company that has s= pent most of the $5.5 billion it sought in recent weeks to stay afloat. Enr= on said in a recent regulatory filing that it was unlikely to "continue as = a going concern" were its credit rating to be slashed to junk status.=20 It became increasingly clear, as Dynegy sought to renegotiate the deal, tha= t Enron's tricky and often indecipherable accounting was becoming a stickin= g point, sources close to the negotiations said.=20 "While it is regrettable to see a leading industry player in difficulties, = this does not reflect a failure of the merchant energy business," Dynegy Ch= airman and Chief Executive Officer Chuck Watson said in a statement.=20 Dynegy said it would exercise its option to buy Enron's Northern Natural Ga= s Pipeline with the $1.5 billion it and partner ChevronTexaco put into the = deal.=20 Dynegy said it stopped trading with Enron as of Wednesday morning, pegging = its exposure at $75 million.=20 A bad sign came earlier on Wednesday, as energy traders said operations had= stopped at Enron's once highly lucrative online trading system, EnronOnlin= e. The unit accounted for up to 90 percent of Enron's earnings, and was con= sidered the jewel of the trading franchise that Dynegy coveted most in its = planned $9.3 billion all-stock takeover.=20 RISK MANAGEMENT FAILURES=20 Enron, which touted itself as an agile risk manager, found its credit and d= ebt had spiraled out of control as a series of partnerships designed to hid= e debt off of its balance sheet caused investors to lose faith in recent we= eks.=20 The partnerships, which included top Enron executives and are the subject o= f a U.S. Securities and Exchange investigation, provided financing in excha= nge for guarantees that Enron's stock stay above certain levels and its cre= dit remain investment-grade. But they came back onto the balance sheet with= a vengeance, as Enron found it would have to meet massive debt obligations= as its shares and credit fell.=20 Enron shares plunged $3.53, or 85 percent, to 61 cents on Wednesday, as the= New York Stock Exchange twice halted trading of Enron shares before announ= cements affecting the company. It's stock has fallen more than 98 percent t= his year.=20 The stock peaked at $90.56 in August 2000, riding high on the cresting wave= of the technology boom after Enron took its trading outfit online and prom= ised to bring its business model into the broadband communications arena.= =20 "They (Enron) entrapped the sophisticates," said Robert Stovall, senior str= ategist at Prudential Securities, referring to what was once an almost fawn= ing admiration for Enron by institutional investors. "I think this is going= to become a classic case."=20 Stovall, with nearly 50 years of Wall Street experience, said he could not = recall any previous corporate unraveling that matches that of Enron.=20 "You would have to go to pre-SEC days for that," he said, referring to the = creation of the SEC in the aftermath of the stock market crash of 1929.=20 THE FINAL CUTS=20 Standard & Poor's, Moody's Investors Service and Fitch all cut their rating= s on the fallen energy trading giant's debt to junk status. S&P said it had= lost confidence in Enron's ability to complete the merger with Dynegy, and= said bankruptcy was a "distinct possibility" if the merger fails.=20 Andre Meade, a Commerzbank analyst who has been consistently bearish on Enr= on and the deal, said its core business deteriorated at an increasing pace = in recent weeks, and the ratings agencies could not find the liquidity they= wanted inside Enron.=20 "The numbers were not enough to soothe them," said Meade, who downgraded En= ron to "sell" from "hold" on Wednesday. "This company should have been down= graded to junk weeks ago. The ratings agencies had given them several weeks= , and they just couldn't hold out anymore."=20 Dynegy on Nov. 9 said it would take over Enron in a deal valued at about $1= 0.41 per Enron share. ChevronTexaco Corp., a major Dynegy shareholder, pled= ged to immediately pump $1.5 billion into Enron to bolster its withering fi= nances.=20 Deal advisers J.P. Morgan Chase and Citigroup have already contributed $1 b= illion to the deal, and were expected to have to put up after Enron was reb= uffed by private equity firms it had approached seeking more cash.=20 Representatives of Dynegy and Enron had haggled over new terms for the take= over late into Tuesday, including a buyout offer half the original price, s= ources close to the talks said.=20 Enron's crash began when it said it would take $1.01 billion in writedowns = and charges against its third-quarter earnings for failed investments. It l= ater admitted that it had to reduce stockholder equity by $1.2 billion to e= xtract itself from partnerships in which now-ousted chief financial officer= Andrew Fastow the managing partner.=20 Those deals, in which Fastow earned about $30 million in management fees, a= re the subject of an SEC investigation and the. Worse yet for Enron, it was= required to restate its earnings going back four years, shaving off $600 m= illion in the process.=20 (Additional reporting by Brendan Intindola, Carolyn Koo, Joseph Silha, Davi= d Sinkman and Jonathan Stempel in New York and Andrew Kelly in Houston.). Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: US energy regulator says "monitoring" Enron situation. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. WASHINGTON, Nov 28 (Reuters) - The U.S. agency that regulates interstate el= ectricity markets said Wednesday it was monitoring Enron Corp as the compan= y's planned rescue by Dynegy Inc collapsed.=20 "We're monitoring the situation but we don't have any comment past that," s= aid a spokeswoman for the Federal Energy Regulatory Commission (FERC). U.S. electricity traders said operations were abruptly halted on Wednesday = morning at Enron's online trading system, Enron Online. U.S. electricity an= d natural gas traders have scaled back deals with Enron since the company's= financial problems emerged a few weeks ago.=20 Enron once ranked as the nation's largest trader of electricity and natural= gas, with some experts estimating the company was involved with about 20 p= ercent of daily trades.=20 FERC, an independent federal agency, oversees interstate electricity market= s, natural gas pipelines and hydroelectric dams.=20 Dynegy said it called off its plan to buy Enron for $9 billion in stock, ci= ting breaches in the merger agreement by Enron. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: Dynegy says no longer trading with Enron. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, Nov 28 (Reuters) - Energy trader Dynegy Inc. said on Wednesday th= at its exposure to rival Enron Corp. is $75 million, in the wake of its fai= led purchase of the beleaguered Enron.=20 Houston-based Dynegy said it is no longer trading with the company as of th= is morning. It also said Enron has 180 days to buy back the Northern Natural Gas pipeli= ne for $1.5 billion. Upon the deal's collapse, Dynegy exercised its option = to buy the pipeline. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: Enron seeks to preserve value after Dynegy pullout. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, Nov 28 (Reuters) - Enron Corp. confirmed on Wednesday that rival D= ynegy Inc. had terminated its takeover offer for the company and said it wa= s taking action to preserve value in its core trading and energy units.=20 Enron said in a statement it had temporarily halted payments other than tho= se necessary to maintain core operations. Enron said it is also reviewing D= ynegy's actions. "Uncertainty during the past few weeks with respect to the merger has drama= tically lowered the market's confidence in Enron and its trading operations= ," Chairman and Chief Executive Ken Lay said. "With Dynegy's termination of= the merger and the ratings agency downgrades, we are evaluating and explor= ing other options to protect our core energy businesses."=20 He said Enron would work to retain the employees necessary to the continuin= g operations of its trading and other core energy businesses.=20 Dynegy accused Enron of breaching the representations it made when the take= over was negotiated on No. 9, invoking an escape clause that let it pull ou= t of the deal.=20 Shares in Enron plummeted $3.39, or 82 percent, to 75 cents in afternoon tr= ading on the New York Stock Exchange. They have fallen more than 98 percent= this year, after reaching a peak of $90.56 in August 2000. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: UPDATE 1-EnronOnline trading system shuts down. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, Nov 28 (Reuters) - Enron Corp's Internet-based energy and metals = trading system was shut down on Wednesday, shortly after a leading credit-r= ating agency downgraded the company's debt to "junk" status, energy traders= said.=20 It was not clear whether the EnronOnline trading system was halted delibera= tely or by a technical problem. Enron officials were not immediately availa= ble for comment. "We were watching the board and suddenly it went blank," said one Northeast= natural gas trader. Activity on EnronOnline was halted just after 11 a.m. = (1600 GMT), the trader said.=20 Energy traders said the Standard & Poor's announcement that it was downgrad= ing Enron debt triggered a brief spike in New York Mercantile Exchange natu= ral gas futures, to $2.82 per million Btu, but prices later slipped to the = low-$2.70s, still up more than 11 cents from Tuesday.=20 "We spiked on the Enron news. People ran in to cover any exposure because o= f the uncertainty. I think they're expecting the company to file for Chapte= r 11 (bankruptcy)," said one Midwest gas and power trader.=20 "The Enron (stock) halt sent a shock through the (power) market and all tra= ding stopped. The Enron guys pulled all their numbers (on EnronOnline)," an= other trader at a Houston-based energy firm said.=20 U.S. natural gas and electricity firms have been steadily scaling back deal= s with Enron for several weeks as fears mounted about the former energy gia= nt's credit standing.=20 "People have been balancing their risk exposure over the last few weeks," a= nother Midwest trader said.=20 Enron was by far the largest U.S. natural gas and electricity trader, with = industry analysts estimating it was once involved in some 20 percent of dai= ly trade in those markets.=20 But since last month, when the company became the target of a Securities an= d Exchange Commission investigation of financial dealings with partnerships= , the Houston-based company's market share has steadily eroded.=20 EnronOnline until recently accounted for about 60 percent of the daily trad= e volume handled by Enron.=20 Enron shares were briefly halted on the New York Stock Exchange this mornin= g following the credit-rating downgrade. After the stock reopened, it dropp= ed $2.84 to $1.30 on the New York Stock Exchange. Enron shares closed Tuesd= ay at $4.14. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: UPDATE 1-Key US lawmaker doesn't see govt solution on Enron. By Susan Cornwell 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. WASHINGTON, Nov 28 (Reuters) - The chairman of the U.S. House Energy and Co= mmerce Committee said on Wednesday he could not see how the government coul= d come to the rescue of Enron Corp. , near collapse after rival energy trad= er Dynergy Inc. pulled out of a deal to buy it.=20 "I can't right now envision anything the government can do, other than enco= urage the parties who are discussing a merger to continue their efforts," s= aid Billy Tauzin, Republican of Louisiana. But he said the government must watch carefully whether the troubles of the= Houston-based Enron - once ranked as the nation's largest trader of electr= icity and natural gas - had implications for U.S. energy supplies and prici= ng.=20 Tauzin noted that Enron had been a "very big contributor" to energy supplie= s in California, which was rocked last winter by a tenfold jump in wholesal= e electricity prices, a string of black-outs and the bankruptcy of the stat= e's largest utility.=20 "We've got to watch that very carefully, obviously. We don't want to be in = another session next year trying to deal with energy problems in California= as a result of some of the events that are occurring right now with Enron,= " Tauzin said.=20 The underlying cause of California's problems last winter was widely seen a= s the state's badly written electricity deregulation law, which did not all= ow power companies to pass through higher wholesale electricity costs to co= nsumers.=20 Tauzin said Enron's decline was unfortunate. "It's a sad story. It's been a= hugely successful enterprise."=20 "I would hope they could work it out. We can't simply step into every bad m= arket decision and every bad financing decision that occurs in American cor= porations in this country and work it out for them. We have to count on the= m to figure it out themselves."=20 "Our job is going to be to make sure in policy we haven't left a breach ope= n where consumers are going to end up short or overpriced in the process," = he added.=20 Enron's financial problems have steadily unravelled since last month, when = it became the target of a Securities and Exchange Commission investigation = of some Enron partnerships.=20 On Wednesday, Dynergy said it called off its plan to buy Enron in a $9 bill= ion stock deal, citing breaches in the merger agreement.The company's credi= t ratings were downgraded to junk status. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 UK: UK power prices rally, Enron news dims trade. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, Nov 28 (Reuters) - British electricity prices rallied on Wednesday = but volumes thinned later in the day as traders took stock of news U.S. tra= der Enron was on the brink of collapse after Dynegy pulled out of a rescue = deal.=20 "Post Enron, not much was done. Most people pulled their bids," said one tr= ader, adding Enron was one of the largest traders in the UK electricity mar= ket. Prompt prices firmed on a combination of colder than usual weather and prod= uction problems at some power stations which hit supplies, said traders.=20 The most striking jump was power for block five on Thursday, covering peak = time from 1500 to 1900 GMT, which sold at 101 pounds per megawatt hour - th= e highest price seen so far this winter, said traders.=20 Prices for half hourly prompt contracts on the UKPX bourse were also high, = they added.=20 Day ahead baseload sold at 26.25 pounds and peak at 35 pounds, with the hig= h prices boosting the forward curve.=20 Q1 02 baseload went through at 19.88 pounds while summer 02 sold at 17.25 p= ounds and winter 02 at 19.35 pounds. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: NYMEX natgas tumbles late on bearish AGA data. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. SAN FRANCISCO, Nov 28 (Reuters) - NYMEX Hub gas, up midday Wednesday on Enr= on Corp.'s financial troubles, tumbled late after bearish AGA data was rele= ased this afternoon, traders said.=20 "Healthy supplies continue to be confirmed week after week with these AGA r= eports. Until we see a guy in Chicago with ice coming off his nose we will = go lower because supplies are abundant and there's no demand," one Northeas= t trader said. The trader said front-month NYMEX prices could fall below $2 per mmBtu in t= he days ahead if widespread and sustainable cold weather failed to material= ize.=20 At 2:48 p.m. EST, December was down 40.6 cents at $2.20 per million British= thermal units (mmBtu) after AGA data was released.=20 Earlier in the session, December, which expires today, rocketed to $2.82 af= ter Standard & Poor's cut energy trading giant Enron's debt to junk status,= a move that threw into question the company's ability to meet its financia= l obligations.=20 Enron is by far the largest U.S. gas and electricity trader, with industry = analysts estimating it was once involved in some 20 percent of daily trade = in those markets.=20 AGA storage data released this afternoon showed U.S. gas stocks for the wee= k ended Nov. 23 rose by 12 bcf, well above Reuters survey estimates for an = unchanged-to 5 bcf withdrawal number, the year-ago slide of 146 bcf and the= five-year average pull of 66 bcf.=20 Total inventories of 3.144 tcf jumped to 642 bcf, or 26 percent, above last= year and 391 bcf above the five year average.=20 Last week, storage, which stands at 95 percent full, broke the all-time rec= ord high of 3.127 tcf hit on Nov. 6, 1998.=20 Most analysts expect the gas glut to grow further in coming weeks, noting l= ast year more than 1 tcf was drawn from inventory during a record cold Nove= mber-December period.=20 Eastern stocks were unchanged at 98 percent of capacity, about 15 percent a= bove last year. Consuming region west storage, which rose 3 bcf for the wee= k, was 46 percent above year-ago levels. Inventories in the producing regio= n gained 13 bcf and stood 41 percent above 2000 levels.=20 The National Weather Service 6-10 day forecast, released late Tuesday, call= ed for above normal temperatures for the eastern two-thirds of the nation, = with seasonal or below seasonal readings expected in the West.=20 Chart traders said the technical picture remained bearish, particularly wit= h cash still more than 70 cents below the screen, and most said they needed= a December close below the November low of $2.482 to signal another leg lo= wer.=20 Below $2.482, December support was pegged at the contract low of $2.415 and= then in the $2.14 area and at $2.00.=20 December resistance was seen first in the $3.00 area and then at the $3.15-= 3.208 gap and the high from four weeks ago of $3.44.=20 In the cash today, Henry Hub swing quotes fell on average 43 cents to $2.30= . Most cash dealers pinned the steep rise to cooler weather and uncertainty= over Enron's future.=20 Midwest pipes jumped 20 to 30 cents to the $2.50 area. In the West, gas at = Waha Hub in west Texas was around 20 cents higher in the mid-$2.50s.=20 Swing gas on Transco at the New York City gate soared about 60 cents to $2.= 72, while Chicago was almost 30 cents higher at $2.49.=20 NYMEX said an estimated 33,265 Henry Hub contracts traded at 11:05 a.m. EST= .=20 NYMEX has been holding abbreviated floor trading sessions following the Sep= t. 11 attacks on the World Trade Center.=20 NYMEX gas open outcry trade will run from 10:00 a.m. to 2:30 p.m., with the= Internet-based ACCESS session held from 3:15 p.m. to 9:00 a.m., through De= c. 31. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 USA: Citigroup, J.P. Morgan off on Enron exposure. 11/28/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, Nov 28 (Reuters) - The collapse of troubled energy trader Enron C= orp.'s sale to Dynegy Inc. on Wednesday triggered a drop in Citigroup Inc. = and J.P. Morgan Chase & Co. Inc. shares, as both banks lent Enron millions = of dollars.=20 Citigroup and J.P. Morgan, which acted as advisors on the takeover deal, ha= ve a total exposure to Enron of about $800 million, Richard Strauss, an ana= lyst at Goldman Sachs Group Inc. , said in a research note. But Strauss est= imated total unsecured loans only amounted to $270 million. Citigroup shares were off $2.30, or 4.55 percent, at $48.25 on the New York= Stock Exchange, while J.P. Morgan shares were off $2.37, or nearly 6 perce= nt, at $37.43.=20 "The after-tax impact to (earnings per share) - should Enron go completely = under - based on Citigroup's 5.2 billion shares outstanding and J.P. Morgan= 's 2 billion shares outstanding would be less than $0.05 for Citigroup and = $0.10 for J.P. Morgan," Strauss said.=20 Analysts on average expect Citigroup to earn 75 cents a share in the fourth= quarter, according to market research firm Thomson Financial/First Call. J= .P. Morgan is expected to earn 50 cents a share, based on the consensus ana= lyst estimate.=20 Three debt rating agencies have cut their Enron bond ratings to "junk" stat= us. Enron shares were down $2.95, or 71.3 percent, at $1.19 in trading on t= he New York Stock Exchange. At one point in the past year, the shares trade= d at $84.88. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 STOCKWATCH Enron down 85 pct as Dynegy walks out of merger deal 11/28/2001 AFX News © 2001 by AFP-Extel News Ltd NEW YORK (AFX) - Shares of Enron Corp fell below 1.00 usd, losing 85 pct, i= n afternoon trade, after Dynegy Inc announced it has terminated the two com= panies' merger agreement, fueling concerns that Enron may file for bankrupt= cy protection, dealers said.=20 At 2.50 pm, Enron was down 3.50 usd, or 85.0 pct, at 61 cents. Dynegy was d= own 3.74 usd at 37.15. The DJIA was down 102.55 at 9,770.05 and the S&P 500= was down 13.93 at 1,135.57. In a statement, Dynegy cited "Enron's breaches of representations, warranti= es, covenants, and agreements in the merger agreement, including the materi= al adverse change provision" as reasons for the collapse of the deal.=20 Earlier, both Standard & Poor's Corp and Moody's Investors Service had lowe= red their rating on Enron's long-term debt to junk status, saying that Enro= n may well have to file for bankruptcy should the deal fall through.=20 "A move by Enron to seek protection from its creditors through a voluntary = filing under Chapter 11 of the US bankruptcy code is a distinct possibility= if the merger falls through," S&P had said.=20 Enron, responding in a statement to the collapse of the deal and the rating= s agencies downgrades, said it is temporarily suspending all payments other= than those necessary to maintain its core operations.=20 ng/pav/ Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron temporarily suspends all payments except those needed to maintain ops 11/28/2001 AFX News © 2001 by AFP-Extel News Ltd HOUSTON (AFX) - Enron Corp said that, in response to the collapse of the pr= opsoed merger with Dynegy Inc and debt downgrades by S&P and Moody's, it is= temporarily suspending all payments other than those necessary to maintain= core operations.=20 In a statement released by the company shortly after Dynegy announced it wa= s pulling out from the tie-up, Enron said it will take actions "designed to= preserve value in the company's core trading and other energy businesses." Chairman and chief executive officer Kenneth Lay said his company is also e= valuating and exploring other options to protect its core energy operations= . "To do this," he added, "we will work to retain the employees necessary t= o the continuing operations of our trading and other core energy businesses= ."=20 rdc/kl Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 CalPERS May Discuss Enron, Action Against Co. In Dec By Jason Leopold and Jessica Berthold 11/28/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) OF DOW JONES NEWSWIRES=20 LOS ANGELES -(Dow Jones)- The investment committee of California's Public E= mployees' Retirement System, the nation's largest public pension fund, whic= h holds 3 million shares in embattled energy company Enron Corp. (ENE), may= decide next month what to do about its holdings in Enron and what action, = if any, to take against the company, a spokeswoman for Calpers said. The shares, worth about $252 million a year ago, are now valued at $2.4 mil= lion based on Enron's current share price of 80 cents. Calpers also has a $= 500 million stake in an Enron partnership called Joint Energy Development I= nvestments II. It's unclear what will happen to Calpers investment in JEDI = II.=20 "We're still analyzing the situation," said Calpers spokesman Pat Macht. "W= e've obviously lost quite a bit of money on this. "Our options include join= ing a shareholder lawsuit, or suing on our own. We have the same legal opti= ons as any other shareholder."=20 The investment committee of Calpers is scheduled to meet Dec. 17. Calpers h= oldings in Enron represent 1% of the $143 billion in holdings Calpers curre= ntly has.=20 Calpers has a history of shareholder activism and has been a party in sever= al shareholder lawsuits against corporations.=20 Enron's bonds were downgraded to below investment grade, or junk status, We= dnesday morning by Wall Street ratings agencies Moody's Investors Service a= nd Standard and Poor's and Fitch.=20 Dynegy Inc. (DYN), Enron's cross-town rival who two weeks ago announced tha= t it would acquire Enron in a stock swap valued at about $9 billion, said W= ednesday it called off the merger agreeement.=20 -By Jason Leopold; Dow Jones Newswires; 323-658-3874; jason.leopold@dowjone= s.com=20 (Jessica Berthold contributed to this article) Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Dynegy calls off $8.4 billion takeover of Enron after credit downgrade By KRISTEN HAYS Associated Press Writer 11/28/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. HOUSTON (AP) - Embattled Enron Corp. lost its savior Wednesday when smaller= rival Dynegy Inc. called off its planned $8.4 billion acquisition of the e= nergy giant after two agencies downgraded Enron's credit rating to junk sta= tus.=20 It was not immediately clear how the development would affect Enron's subsi= diary in Oregon, Portland General Electric, which Enron had hoped to sell t= o Portland-based Northwest Natural Gas, or several lawsuits by PGE employee= s to retrieve retirement savings lost when Enron stock tanked this fall. The downgrade triggered immediate payment of billions of dollars in debt th= at Enron likely can't pay, leaving the once-mighty energy trader facing alm= ost certain bankruptcy, analysts said.=20 "It's the end of Enron, no question about it," said Gordon Howald, an analy= st at Credit Lyonnais Securities in New York. "I don't know who else could = step in."=20 Trading in both stocks were halted on the news. Enron shares had plunged $2= .91, or 71 percent to $1.20 in extremely heavy trading Wednesday on the New= York Stock Exchange; less than a year ago, they were trading at $84.87. Dy= negy shares were off $4.08, or 10 percent, to $36.81.=20 In a statement, Dynegy said Enron had breached its acquisition agreement, t= riggering a "material adverse" clause and causing it to call of the deal.= =20 "While it is regrettable to see a leading industry player in difficulties, = this does not reflect a failure of the energy merchant business," said Dyne= gy chairman and chief executive Chuck Watson.=20 The Dynegy move came after Standard & Poor's and Moody's Investors Service = both cited a loss of confidence that the deal will be consummated, and said= that Dynegy's willingness to go through with the buyout has been compromis= ed by continued erosion in investor confidence and Enron's core energy trad= ing business.=20 The downgrades make $3.9 billion of Enron debt due immediately, and up to $= 16 billion in other debt originally due next year could come due earlier.= =20 In its statement, Dynegy also said it would exercise its right to purchase = Enron's Northern Natural Gas pipeline, an option it received after it and C= hevronTexaco - which holds a 26 percent stake in Dynegy - pumped $1.5 milli= on into the ailing Enron.=20 Despite Dynegy's claim to the pipeline, analysts are anticipating a battle = over Enron's assets in bankruptcy court.=20 "It's going to be a fight" between Dynegy and Enron's creditors, Howald sai= d.=20 Spokesmen for both Enron and Dynegy didn't immediately return repeated call= s seeking comment Wednesday, though Dynegy scheduled a conference call for = later in the afternoon.=20 Enron and Dynegy, both based in Houston, had spent the last several days tr= ying to hammer out a revision to their Nov. 9 merger agreement, which value= d Enron stock at more than $10 per share.=20 "This comes in response to the fact that they weren't able to craft a deal = last night. They were working on getting more cash (from banks shepherding = the merger) last night, but they didn't get it," said A.G. Edwards & Sons a= nalyst Mike Heim said. "I think bankruptcy's not too far away."=20 Raymond James analyst Jon Kyle Cartwright predicted Dynegy will survive wit= h a few battle scars.=20 "I believe we all misunderstood how dramatic a credibility crisis can be in= a recession in a bear market," he said. "The speed at which Enron collapse= d caught us all off guard."=20 Enron last month revealed that partnerships run by its executives had allow= ed the company to keep about half a billion in debt off its books and allow= ed the executives to profit from the arrangements. Enron's dealings with th= ose partnerships are now the subject of a Securities and Exchange Commissio= n investigation.=20 The company ousted its top financial officer in October, and several weeks = ago restated its earnings back to 1997 - eliminating more than $580 million= in reported income.=20 ---=20 On the Net:=20 http://www.enron.com=20 http://www.dynegy.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Dynegy Terminates Merger With Enron; Conference Call Scheduled for 12:30 CS= T, 1:30 p.m. EST 11/28/2001 Business Wire (Copyright © 2001, Business Wire) HOUSTON--(BUSINESS WIRE)--Nov. 28, 2001--Dynegy Inc. (NYSE:DYN)=20 -- Company exercises right to acquire common stock of Northern Natural Gas pipeline=20 -- Dynegy's energy delivery network and core businesses solid=20 -- Industry had time to prepare, market has adjusted=20 Dynegy Inc. (NYSE:DYN) today reported that it has terminated its previously= announced merger agreement with Enron Corp. (NYSE:ENE). The company cited = Enron's breaches of representations, warranties, covenants and agreements i= n the merger agreement, including the material adverse change provision.=20 "While it is regrettable to see a leading industry player in difficulties, = this does not reflect a failure of the energy merchant business, said Dyneg= y Chairman and CEO Chuck Watson. "Dynegy's customer-based, asset-backed ene= rgy delivery network has been the driver of our 45 percent compounded annua= l growth rate for the past 16 years and will continue to provide us with ea= rnings sustainability and future growth.=20 ChevronTexaco, which owns 26 percent of Dynegy's outstanding common shares,= had contributed $1.5 billion to Dynegy as a participant in the transaction= . Dynegy used the $1.5 billion to purchase 100 percent of the preferred sto= ck of Enron subsidiary, Northern Natural Gas pipeline (NNG). Dynegy has exe= rcised its option to purchase all the membership interests in the entity wh= ich indirectly owns all of the common stock of NNG, subject to satisfaction= of closing conditions. Northern Natural, headquartered in Omaha, Nebraska,= owns and operates 16,500 miles of interstate natural gas pipeline spanning= from the Permian Basin of Texas to the Great Lakes. It has historically be= en a strong earnings contributor, and will be a positive addition to Dynegy= 's energy delivery network, said the company.=20 "The industry has reacted and adjusted well to the potential loss of a mark= et participant over the past several weeks," said Dynegy President and Chie= f Operating Officer Steve Bergstrom. "With our superior systems, technology= infrastructure and people, Dynegy and its industry peers are ready to abso= rb any added volatility in the energy markets."=20 About Dynegy Inc.=20 Dynegy Inc. is one of the world's premier energy merchants. Through its glo= bal energy delivery network and marketing, trading and risk management capa= bilities, Dynegy provides innovative solutions to customers in North Americ= a, the United Kingdom and Continental Europe.=20 Conference Call Simulcast=20 Dynegy will simulcast a conference call related to the terminated merger ag= reement live via the Internet on Wednesday, November 28, 2001 at 12:30 p.m.= CT, 1:30 p.m. ET. The web cast can be accessed via www.dynegy.com (click o= n "Investor Relations").=20 Certain statements included in this news release are intended as "forward-l= ooking statements" under the Private Securities Litigation Reform Act of 19= 95. These statements include assumptions, expectations, predictions, intent= ions or beliefs about future events. Dynegy cautions that actual future res= ults may vary materially from those expressed or implied in any forward-loo= king statements. Some of the key factors that could cause actual results to= vary from those Dynegy expects include changes in commodity prices for ene= rgy or communications products or services; the timing and extent of deregu= lation of energy markets in the U.S. and Europe; the effectiveness of Dyneg= y's risk management policies and procedures and the creditworthiness of cus= tomers and counterparties; the liquidity and competitiveness of wholesale t= rading markets for energy commodities, including the impact of electronic o= r online trading in these markets; operational factors affecting Dynegy's p= ower generation or Dynegy's midstream natural gas facilities; uncertainties= regarding the development of, and competition within, the market for commu= nications services in the U.S. and Europe; uncertainties regarding environm= ental regulations or litigation and other legal or regulatory developments = affecting Dynegy's business; general political, economic and financial mark= et conditions; and any extended period of war or conflict involving the Uni= ted States or Europe. More information about the risks and uncertainties re= lating to these forward-looking statements are found in Dynegy's SEC filing= s, which are available free of charge on the SEC's web site at http://www.s= ec.gov. CONTACT: Dynegy Inc., Houston Analysts: Margaret Nollen, Arthur Shannon or = Katie Pipkin, 713/507-6466 or Media: John Sousa or Steve Stengel, 713/767-5= 800=20 12:58 EST NOVEMBER 28, 2001=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Dynegy Pull out of Enron Purchase; Credit Ratings Cut (Update6) 2001-11-28 13:09 (New York) Dynegy Pull out of Enron Purchase; Credit Ratings Cut (Update6) (Updates to add Dynegy comment; share price.) New York, Nov. 28 (Bloomberg) -- Dynegy Inc. abandoned its proposed purchase of Enron Corp., said Dynegy in a press statement. The decision threatens to force Enron, once the country's largest energy trader, into bankruptcy. Standard & Poor's Corp. cut Enron's credit rating to junk as bankers failed to raise $1.5 billion Enron needed to operate until the deal was completed. The lack of funds and the prospect of a downgrade contributed to Dynegy's decision to scrap the acquisition, which was valued at $23 billion on Nov. 9. Enron shares fell as much as 71 percent to $1.20, its lowest level in at least 19 years. The company's 6.4 percent bonds, which mature in 2006, were quoted at 20 cents on the dollar, down from 53 yesterday. At that price the bonds yield 57 percent. ``The reality is Enron's going bankrupt,'' said Michael Willingham, a risk manager at Itochu International Inc. ``Enron touted themselves as the king of risk management, but it doesn't look like they've managed their risk very well.'' Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B. Lee tried for for two weeks to raise the cash Enron needed. Investors including Saudi Prince Alwaleed Bin Talal, the Blackstone Group LP and the Carlyle Group Inc. turned them down because of concern Enron wouldn't be able to pay its debts. That concern was heightened after Enron disclosed a previously undisclosed $690 million interest payment due this week. Dynegy said in a statement distributed by Business Wire that it terminated its agreement because Enron breached covenants. Chairman and CEO Chuck Watson said Dynegy would invoke its right to purchase Enron's Northern Natural Gas pipeline. Dynegy used an investment of $1.5 billion from ChevronTexaco Corp., which owns one quarter of Dynegy, to purchase the Enron unit, which operates 16,500 miles of natural gas pipeline. Enron spokeswoman Karen Denne didn't return calls for comment. Trading Doubts Enron faced a cash crunch in part because some trading partners lost confidence the company would have the cash to pay bills. As a result, they either demanded more collateral to trade or restricting trading with the Houston-based company. EnronOnline, Enron Corp.'s online trading system, stopped allowing trades and quit posting bids and offers for natural gas late this morning, say traders who use the Web site. Enron said yesterday that EnronOnline handles about 60 percent of its trading business, or about $2.8 billion a day in trading on average over the last 30 days. ``We can log in, but there is nothing there, nothing to buy and nothing to sell,'' said Juha Laiho, an energy trader at Finland-based Fortum Oyj in Houston. ``It went down some time this morning.'' S&P cut its rating on Enron to ``B-'' from ``BBB-'' and Moody's lowered its rating to ``B2'' from ``Baa3.'' Both ratings are below investment grade. Enron has $15.4 billion of debt. Andre Meade, an analyst at Commerzbank Securities, said that Enron's junk credit rating would ``effectively shut down the bulk of their trading and marketing operations and trigger $3.3 billion in liability payments.'' ``It's not likely Enron will be able to raise the capital to settle those payments and continue its business,'' said Meade. The large debts make it unlikely that investors will receive much should the company file for bankruptcy, said investors. ``This will be a traditional bankruptcy in which equity holders get nothing,'' said Edward Paik, who has 1.6 million Enron shares among $7 billion in assets he helps manage for Liberty Funds Group. ``This company doesn't have the safety net in terms of assets that other companies do.'' Enron's Online Trading Unit Has Stopped, Traders Say (Update2) 2001-11-28 13:14 (New York) Enron's Online Trading Unit Has Stopped, Traders Say (Update2) (Adds confirmation the merger collapsed.) New York, Nov. 28 (Bloomberg) -- EnronOnline, Enron Corp.'s Internet trading system, stopped allowing trades and quit posting bids and offers for natural gas late this morning, say traders who use the Web site. Dynegy Inc. canceled plans to buy Enron as credit ratings companies cut the energy trader to junk status. The collapse of the Dynegy takeover led analysts to speculate Enron will file for Chapter 11 bankruptcy protection. Enron said yesterday that the EnronOnline Web site handles about 60 percent of its trading business, or about $2.8 billion a day in trading on average over the last 30 days. ``We can log in, but there is nothing there, nothing to buy and nothing to sell,'' said Juha Laiho, an energy trader at Finland-based Fortum Oyj in Houston. ``It went down some time this morning.'' Traders had already been wary of making new contracts with Enron because of concerns about its cred
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