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Enron asks court to OK asset sales by year-end

US energy trading giant Enron Corp has asked the judge overseeing its bankruptcy case to approve the sale of two assets for a total of $390 million before the end of the year.

According to papers filed in the US Bankruptcy Court in New York's southern district, the proposed sales were part of an effort begun by Enron more than a year ago to return its companies "to their core operations."

Enron said its ability to reorganize hinged on whether its non-debtor affiliates can complete business transactions begun prior to the bankruptcy filing.

Enron Wind Development Corp has agreed to sell two newly completed wind power generating facilities in West Texas, Indian Mesa and Clear Sky, for $175 million to American Electric Power Inc of Columbus, Ohio.

Enron Canada Power Corp plans to sell its interest in electricity generated by the Sundance power generation plant in Alberta, Canada for $220 million to a partnership of AltaGas Services Inc and the TransCanada Energy unit of TransCanada Pipelines Ltd.

The reasons for having to complete the sales by year end vary.

In Enron Wind's case, if the Texas facilities sale is completed in 2001, AEP can take a $6 million depreciation deduction for the year. Otherwise, AEP will reduce the purchase price by $6 million, court papers say.

The year-end deadline for the Sundance electricity interest sale is due in part to rumors Enron Corp said are already circulating about whether the Enron Canada Power affiliate might itself have to file for bankruptcy or whether a bankruptcy-related default could make the Sundance assets "worthless."

"The urgency on the sides of all parties to complete the sales transaction" by Monday has escalated," court papers say.

Enron noted in the court papers, filed on December 21, that only 23 of its 3,500 units are part of the bankruptcy filing and that offers continue to come in for non-debtor assets. They include turbines, power plant projects, emission credits issued by California air districts, and oil and gas exploration and development interests.

While the sale of non-debtor assets is not subject to court approval, buyers have apparently conditioned the closing of any deals on having either a court order or the approval of the bankruptcy creditors committee.

Other sales still being negotiated by Enron Corp include those of Enron LNG Power Atlantic Ltd to an undisclosed buyer for $266 million; and of Enron Oil & Gas India Ltd to British oil and gas producer BG plc for $388 million, according to the court filings.

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