Embattled Enron Corp. has decided to keep its interstate natural gas pipelines and intends to form a new company to oversee the assets, the company’s interim CEO Stephen Cooper said Wednesday.

“In aggregate we were not satisfied [we were] getting the full value for our properties” from bids that the company received, he told reporters during a web cast conference. Moreover, Enron believes the earnings potential of the gas pipelines will be “substantially more meaningful” than a straight sale of the assets, Cooper said, adding that he expects the new company to be a “highly profitable organization” and a key competitor in the industry.

The new company, tentatively called “PipeCo,” would include Enron’s interests in the Texas-to-California Transwestern Pipeline system, Citrus Corp. and Northern Plains Natural Gas Co, as well as some related service companies that provide support to the pipes. Enron has a 50% ownership in Citrus, which is parent to the 4,900-mile Florida Gas Transmission (FGT) pipeline. The Northern Plains asset includes several Midwest pipes: Northern Border Pipeline, Midwestern Gas Transmission, Viking Gas Transmission and Guardian Pipeline.

Enron decided to retain the pipeline assets after rejecting “multiple bids” for the interests, according to the Houston-based energy company. It noted that Enron’s board of directors voted Wednesday to move forward with the creation of the new pipeline company. It further said the company’s Official Unsecured Creditors’ Committee supports the decision.

Cooper noted that one or more investors have expressed an interest in taking a minority position in the new company. He said he was “open” to that prospect.

Most of the debt associated with the pipelines — which he estimated at less than $1 billion total — will be assumed by “PipeCo.” This includes both project debt and, in Transwestern’s case, debt secured by assets. Nevertheless, “we have every expectation [that] PipeCo will have a strong balance [sheet],” Cooper told reporters.

He said Enron, which has been in bankruptcy since December 2001, currently has $5 billion in cash on hand. “I think you’ll see the pace of recovery increasing” each quarter. He indicated, however, the company is likely to ask the court for an extension of the April 30 deadline for filing its reorganization plan.

Cooper also said Enron currently is preparing to present a plan to the board to form a new entity, referred to as “InternationalCo,” which would oversee the company’s interests in certain international assets. It expects the new company to be created in connection with the confirmation of Enron’s plan of reorganization and its shares would be distributed to creditors.

The company, assuming it is approved by the board and the Unsecured Creditors’ Committee, would include Enron’s energy production and transmission assets in Central and South America, Europe, the Philippines and China, Cooper said.

Enron is continuing its efforts to sell Portland General Electric, Sithe/Independence Power Partners, Eco-Electrica and Compagnie Papiers Stadacona, along with other company assets, it noted. Cooper said there were a number of potential buyers interested in Portland General, but he declined to say who or how many.

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