Just three months after Houston-based Dynegy announced it wouldenter the North American wholesale broadband communicationsbusiness, it now is storming into Europe with a deal to buyLondon-based iaxis Ltd., a cash poor fiber optic network operator.

But Dynegy’s growth won’t be stopping at the water’s edge. Inan all-day analysts’ conference last week, Dynegy senior executiveslaid out their strategies for future growth, saying they expectearnings to grow 20% to 25% per year over the next three yearsspurred by an asset-based growth plan.

Announcing its target range for 2001 recurring earningsforecast, the company expects earnings per diluted share of $1.65to $1.75, an increase of 25% to 30% from forecasts for 2000. Thecompany also said that its recurring EPS growth rate through 2003would average 20% to 25%. Energy convergence is expected to grow by30% to 40% a year, and liquids is expected to move upward 10% to12%. Dynegy’s transmission/distribution also is slated to grow by5% to 10%.

The iaxis deal calls for Dynegy to pay a nominal amount forshares of the company and then provide $40 million in payments toiaxis creditors who will receive 40% of their claims against thecompany. Dynegy also will invest another $160 million to extendiaxis’ network. The London company is owned by iaxis NV, a Dutchventure capital holding company that owns and operates an8,750-mile (14,000-kilometer), 10-gigabit fiber optic networkthroughout Europe. The network has 40 hub sites.

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