Enron Pulls Plug on $3.1 Billion PGE Sale
Sierra Pacific Resources and Enron Corp. agreed last week to terminate their purchase and sale agreement for Enron's wholly owned electric utility subsidiary, Portland General Electric. The termination had been hinted at during a recent conference call with Enron CEO Jeffrey Skilling. The western energy crisis was blamed for the cancellation.
"While this acquisition would have offered many efficiencies in utility distribution for customers in both Nevada and Oregon, completing it was becoming increasingly difficult in the current market and political environment in the West," said Walt Higgins, CEO of Sierra Pacific Resources. "Terminating this agreement now minimizes further costs to our shareholders as we continue to focus our attention on customers in Nevada and the Lake Tahoe region of California."
Enron agreed to sell PGE in November 1999 to Sierra for $3.1 billion, including $1 billion in debt assumption, $2.02 billion in cash and an $80 million PGE-merger-payment obligation (see NGI, Nov. 15, 1999).
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