enron mentions stocks close higher as investors cheer earnings news
dow jones business news - 10 / 22 / 01
enron faces holder suit from fincl chief pacts
dow jones news service - 10 / 22 / 01
shapiro haber ag edwards downgrades
afx news - 10 / 22 / 01
enron corp . information requested by sec .
regulatory news service - 10 / 22 / 01
enron shares slide as sec seeks information on deals with cfo ' s partnership
dow jones business news - 10 / 22 / 01
enron says sec asks about related - party transactions ( update 8 )
bloomberg - 10 / 22 / 01
uniprime signs letter of intent for wind energy park project
business wire - 10 / 22 / 01
stocks close higher as investors cheer earnings news
by peter edmonston
10 / 22 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones & company , inc . )
the wall street journal online
stocks rallied sharply monday despite the widening anthrax scare , as a batch of better - than - expected quarterly earnings reports cheered investors .
the dow jones industrial average gained 172 . 92 , or 1 . 9 % , to close at 9377 . 03 after gaining 40 . 89 points friday . the nasdaq composite index rose 36 . 75 , or 2 . 2 % , to 1708 . 06 after climbing 18 . 59 points in the previous session .
other major stock indexes gained ground monday . the standard & poor ' s 500 - stock index added 16 . 42 to 1089 . 90 , the new york stock exchange composite index rose 7 . 13 to 561 . 45 , and the russell 2000 index gained 4 . 80 to 430 . 50 .
bonds were mixed and the dollar strengthened .
the stock market ' s gains were tempered briefly by news that a postal worker in washington , d . c . , was diagnosed with anthrax contracted by inhalation . additionally , two other postal workers in washington have died and their deaths are being investigated to determine if they died of that same ailment .
but stocks took the anthrax reports in stride , suggesting a new and surprising level of confidence among market participants , some analysts said monday . " the market is really shrugging off this news , " said mark donahoe , a managing director at u . s . bancorp piper jaffray .
upbeat earnings news from american express , released monday afternoon , seemed to give stocks an additional lift .
investors may be shifting their focus away from concerns about anthrax exposure and u . s . military maneuvers in afghanistan to take a closer look at quarterly earnings results , said steven kroll sr . , managing director at monness , crepsi & hardt .
the uncertainty on the global front " looks like it is going to be a long , drawn - out affair , " mr . kroll said . " i think stocks will revert back to being earnings - driven . "
although dismal by ordinary standards , last week ' s flood of quarterly earnings reports got a reasonably upbeat reception from investors , who seem to have approached them with extremely low expectations . " the markets acted pretty well last week in light of some very ugly earnings , " said mr . donahoe of u . s . bancorp . that resilience might be giving hope to investors this week , he added .
still , investors will be carefully sifting through quarterly results in the coming week to get a fix on how the fourth quarter is shaping up , mr . kroll argued .
third - quarter earnings showed several pockets of strength on monday , with big companies such as minnesota mining and manufacturing and u . s . steel posting results that met or topped analysts ' estimates .
the dow industrials got an additional boost shortly after 2 p . m . edt when index component american express reported earnings that , excluding certain items , beat wall street previously lowered estimates .
the financial - services concern posted net income of $ 298 million , or 22 cents a share , down 60 % from $ 737 million , or 54 cents a share , a year earlier . excluding charges related to a corporate restructuring and the september 11 attacks , american express said it would have earned $ 595 million , or 45 cents a share , for the latest quarter . analysts had been expecting earnings of 30 cents a share , according to thomson financial / first call .
shares of american express surged after the quarterly earnings release , closing up 3 . 4 % at $ 30 . 32 .
chip stocks helped lead the nasdaq composite higher , with the philadelphia semiconductor index gaining 5 . 4 % . the rally seemed to be a continuation of friday ' s gains in the sector , sparked by positive earnings news from kla - tencor .
u . s . steel , the nation ' s no . 1 steelmaker , said it swung to a third - quarter loss from a profit a year earlier , hurt by oversupply and a weak economy . but excluding charges related to the closure of one mill and damage at another , u . s . steel said its loss was much narrower than what was forecast by analysts surveyed by thomson financial / first call . shares of u . s . steel rose 9 . 7 % to $ 14 . 74 .
investors also sent 3 m shares nearly 5 % higher after the maker of chemical and adhesive products squeaked by wall street estimates , despite a 21 % decline in net income . and oil producers conoco and usx - marathon group handily beat analysts ' forecasts .
but not all the earnings news was cheery . local phone company sbc communications recorded net income that was slightly below estimates . shares of sbc , a component of the dow industrials , fell 5 . 1 % to $ 41 . 40 .
meanwhile , the outlook for corporate profits in the fourth quarter seems discouraging , some analysts noted . on monday , 3 m guided wall stret ' s earnings expectations lower for the upcoming quarter , and a top executive at u . s . steel told analysts that the company ' s fourth quarter would be " difficult . "
companies " are meeting third quarter expectations , but they are talking down the fourth quarter , " said mr . kroll of monness crespi & hardt . he said that some of the rise in monday ' s markets might be a carryover from friday ' s buying activity related to the expiration of u . s . stock option and index option contracts , an event known as " double witching . "
one of the hardest - hit stocks on monday was enron , an energy concern that said that the securities and exchange commission was seeking information about certain complex transactions it undertook with a limited partnership organized by its chief financial officer . shares of enron plunged 21 % to $ 20 . 65 .
overseas , stocks closed higher . london ' s financial times - stock exchange 100 - share index gained 1 . 1 % , while frankfurt ' s xetra dax index rose 2 % . earlier in the day , japan ' s nikkei 225 average closed with a gain of 0 . 3 % , but hong kong ' s hang seng index ended 0 . 3 % lower .
in economic news , the conference board reported that its index of leading indicators for the month fell 0 . 5 % in september , matching the estimates of economists surveyed by thomson global markets . the index - - a composite of measurements aimed at forecasting likely changes in the economy - - included some data gathered after the sept . 11 attacks .
the decline , which was the index ' s largest one - month drop since january 1996 , confirmed that the widespread weakness in the u . s . economy is deepening , the conference board said . falling stock prices and rising initial unemployment claims were two of the index components that contributed most negatively to the september reading .
in august , the leading - indicators index slipped 0 . 1 % , less than the previous estimate of a 0 . 3 % decline . even so , the back - to - back declines paint a bleak economic picture , said conference board economist ken goldstein .
the two - month decline in the index suggests that the already - weak economy is likely to remain weak into next year , mr . goldstein said . the overall reading from these numbers indicates that manufacturing and services are experiencing a significant slowdown .
in major u . s . market action :
stocks rose . on the big board , where 1 . 09 billion shares were traded , 1 , 813 stocks rose and 1 , 291 fell . on the nasdaq , 1 . 49 billion shares changed hands .
bonds were mixed . the 10 - year treasury note rose less than 1 / 16 point monday , or 62 . 5 cents for each $ 1 , 000 invested . the yield , which moves inversely to its price , fell to 4 . 618 % . the 30 - year bond fell 1 / 16 point to yield 5 . 364 % .
the dollar rose . the dollar bought 122 . 56 yen , compared with 121 . 20 yen late friday . the euro traded at 89 . 18 u . s . cents , down from 89 . 84 cents late friday .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron faces holder suit from fincl chief pacts
10 / 22 / 2001
dow jones news service
( copyright ( c ) 2001 , dow jones dow jones newswires ; 201 - 938 - 5400
copyright ? 2000 dow jones & company , inc . all rights reserved .
shapiro haber & urmy files class action on behalf of purchasers of enron corporation stock ( nyse : ene ) in the period from july 13 , 2001 through october 16 , 2001
10 / 22 / 2001
pr newswire
( copyright ( c ) 2001 , pr newswire )
boston , oct . 22 / prnewswire / - - the law firm of shapiro haber & urmy llp has filed a class action suit alleging securities fraud in the united states district court for the southern district of texas ( houston division ) , 515 rusk ave . , houston , texas 77002 , against enron corporation ( " enron " ) ( nyse : ene ) and certain of its officers and directors .
the case was filed on behalf of all purchasers of the common stock of enron during the period from july 13 , 2001 through october 16 , 2001 , inclusive ( the " class period " ) .
the complaint alleges that the defendants violated section 10 ( b ) of the securities exchange act of 1934 ( " the exchange act " ) , and rule 10 b - 5 promulgated thereunder , and that defendants ' wrongful conduct artificially inflated the price of enron common stock during the class period . the complaint charges that the defendants misrepresented and concealed material facts concerning the company ' s financial transactions with two partnerships established by enron ' s chief financial officer , which resulted in substantial losses to enron and a reduction in shareholders ' equity of over $ 1 billion . the price of enron ' s common stock plummeted over 20 % in just three trading days following disclosure of the financial losses resulting from enron ' s dealings with these partnerships .
plaintiff seeks to recover damages suffered by class members and is represented by the law firm of shapiro haber & urmy llp , which has successfully prosecuted numerous securities class actions on behalf of defrauded investors . more information about the firm and its qualifications is available on the firm ' s website at www . shulaw . com .
if you are a member of the class described above , you may wish to join the action . you may move the court to serve as a lead plaintiff no later than december 21 , 2001 .
if you would like a copy of the complaint , would like to discuss joining this action as a lead plaintiff , or would like to inform us that you are a member of the proposed class , please contact thomas g . shapiro , esq . or liz hutton , paralegal , shapiro haber & urmy llp , 75 state street , boston , ma 02109 , ( 800 ) 287 - 8119 , fax at ( 617 ) 439 - 0134 , or e - mail at cases @ shulaw . com .
make your opinion count - click here
/ contact : thomas g . shapiro , esq . or liz hutton , paralegal , shapiro haber & urmy llp , + 1 - 800 - 287 - 8119 , cases @ shulaw . com / 16 : 54 edt
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron board approved partnerships run by chief financial officer
10 / 22 / 2001
pr newswire
( copyright ( c ) 2001 , pr newswire )
new york , oct . 22 / prnewswire / - - an enron ( nyse : ene ) shareholder has filed a derivative suit in texas state court which charges that enron ' s board of directors breached their fiduciary duties to the company by allowing its cfo , andrew fastow to create and run certain limited partnerships . the enron board lost the company over $ 35 million by allowing fastow to run these partnerships , which engaged in transactions with enron and presented a clear conflict of interest for the enron cfo .
in addition to other transactions , the limited partnerships bought enron assets , permitting fastow to use his inside knowledge of the company ' s financial condition to earn millions of dollars for himself and the limited partnerships . on october 16 , 2001 the company announced that it would take a $ 35 million charge relating to the limited partnerships . it was also revealed that the company had to repurchase 55 million of its shares in order to unwind its involvement in the partnerships , thereby reducing the company ' s shareholder equity by $ 1 . 2 billion .
on october 22 , 2001 , the company announced that the sec recently requested additional information regarding these limited partnerships .
if you would like additional information regarding this lawsuit , you may contact murielle steven walsh at pomerantz haudek block grossman & gross llp , new york , new york , 888 - 476 - 6529 ( ( 888 ) 4 - pomlaw ) or mjsteven @ pomlaw . com .
make your opinion count - click here
/ contact : murielle steven walsh , esq . of pomerantz haudek block grossman & gross llp , + 1 - 888 - 476 - 6529 ( + 1 - 888 - 4 - pomlaw ) , mjsteven @ pomlaw . com / 15 : 41 edt
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : update 3 - sec looks into enron deals , stock slides 20 pct .
by david howard sinkman
10 / 22 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 22 ( reuters ) - shares of enron corp . slumped more than 20 percent on monday after it said u . s . regulators are looking into company transactions , another blow to a company whose chief executive resigned in august .
a spokesman for north america ' s biggest buyer and seller of natural gas and electricity declined to discuss an inquiry by the u . s . securities exchange commission , but said it was cooperating . the sec also declined to outline details of its inquiry .
investor confidence in the company has been rocked by reports from the wall street journal about its relationship with two limited partnerships that were run until recently by enron ' s chief financial officer , andrew fastow . the company also reported last week its first quarterly loss in more than four years , and took $ 1 . 01 billion in charges and writedowns on ill - fated investments .
problems at enron surfaced two months ago when ceo jeff skilling resigned after only six months at the helm .
enron shares declined $ 5 . 49 , or 21 percent , to $ 20 . 56 in monday afternoon trade on the new york stock exchange , shaving off almost $ 4 . 2 billion of its market capitalization . the stock , the biggest decliner by percentage loss on the nyse , fell as much as 22 . 8 percent on monday , when it opened at its lowest level since september 1998 .
shares declined 23 percent last week after the journal ran its first story about the limited partnerships on wednesday .
enron declined to comment on whether the sec ' s inquiry into " certain related party transactions " involved the partnerships .
" related party transactions " is the heading used by enron in its 1999 and 2000 annual reports to discuss dealings with its limited partnerships , ljm cayman lp and the larger ljm 2 co - investment lp , which engaged in complex hedging transactions involving company assets worth hundreds of millions of dollars .
fastow severed his ties to the partnerships in june . ljm was set up in june 1999 for energy - related investments , and ljm 2 in december 1999 for energy - and communication - related investments .
the journal reported $ 35 million of its third - quarter loss of $ 638 million were connected with the limited partnerships
curt launer , an analyst at credit suisse first boston , said investors should question enron ' s use of real value accounting when the value of certain assets , " most notably in telecommunications , " have declined precipitously .
" investors have had several opportunities to question enron ' s credibility and at each of those turns the share price has declined , " launer said .
some analysts , though , cautioned against assuming fire when there might only be smoke .
" this is an inquiry , not an investigation , and i cannot imagine enron ' s attorneys or accountants would allow it do to something illegal , " said merrill lynch analyst donato eassey .
" it ' s easy for the market to kick a company when its down , but these challenges do not last for a solid company , and we think enron is one . "
shares in the company are down 75 percent this year .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares plunge 20 percent after acknowledging sec inquiry
10 / 22 / 2001
associated press newswires
copyright 2001 . the associated press . all rights reserved .
houston ( ap ) - shares of enron corp . plunged more than 20 percent monday after the energy trading giant said the securities and exchange commission had sought information company ' s transactions with limited partnerships , which were managed by an enron senior officer .
in a statement , enron said it had provided the regulatory agency with information in response to an inquiry last week .
" we welcome this request , " enron chairman and chief executive officer kenneth l . lay said in a statement monday . " we will cooperate fully with the sec and look forward to the opportunity to put any concern about these transactions to rest . "
investors were upset by the news , however , sending shares of enron down dlrs 5 . 30 to dlrs 20 . 75 in heavy trading on the new york stock exchange .
the transactions took place in 1999 and 2000 , according to houston - based enron ' s 2000 annual report . they resulted in a dlrs 16 million pre - tax gain to enron in 1999 and a dlrs 36 million loss in 2000 .
enron officials declined to provide details about the transactions or name the limited partnerships , instead referring questions to a section of the annual report on related party transactions .
" enron entered into transactions with ( limited partnerships ) to hedge certain merchant investments and other assets , " according to the section in the annual report .
enron spokesman mark palmer said the sec first contacted enron last week and described the request is an " informal inquiry . "
" this is not an investigation , " he said . " we see the request as an opportunity to put this issue behind us . "
sec spokesman john heine said he could not comment on the filings . " we can ' t confirm or deny that type of activity , " heine said .
the electricity marketer and natural gas provider says both internal and external auditors and attorneys reviewed the related party arrangements , the company ' s board was fully informed of and approved the arrangements , and they were disclosed in the company ' s sec filings .
copyright ? 2000 dow jones ag edwards downgrades
10 / 22 / 2001
afx news
( c ) 2001 by afp - extel news ltd
new york ( afx ) - shares of enron corp were down sharply in late morning trade , after the securities and exchange commission requested the company to provide information on certain related - party transactions , prompting ag edwards to downgrade the stock to ' hold ' from ' buy ' , dealers said .
at 11 . 10 am , enron was down 4 . 29 usd , or 16 . 47 pct , at 21 . 76 . the djia was up 57 . 57 points at 9 , 261 . 68 , and the s & p 500 composite index was up 5 . 57 points at 1 , 079 . 05 .
in a statement this morning , enron confirmed that the sec had requested documents , and said it would " cooperate fully " with the commission .
however , the company did not give any details of the transactions concerned or of the reasons behind the sec ' s request .
according to ag edwards analyst mike heim , enron " significantly reduced " its equity to unroll a partnership arrangement with a partially - owned subsidiary formerly run by enron ' s chief financial officer .
" this arrangement , which was not discussed in past sec filings , has led to a growing distrust of the company by the financial community .
" in our opinion , the market is most likely overreacting to the news being disseminated over the last few days .
" however , we can give no assurances that all the problems at enron have been fully disclosed , " heim said .
in its statement this morning , enron said although its internal and external auditors and attorneys have reviewed the related - party arrangements , adding that the board was " fully informed of and approved these arrangements " , which were disclosed in the company ' s sec filings .
" we believe everything that needed to be considered and done in connection with these transactions was considered and done , " said chief executive kenneth lay .
ng / gc for more information and to contact afx : www . afxnews . com and www . afxpress . com
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron corp . information requested by sec .
10 / 22 / 2001
regulatory news service
( c ) 2001
intnth 22 october 2001
enron announces sec request , pledges cooperation
houston - enron corp . ( nyse : ene ) announced today that the securities and exchange commission has requested that enron voluntarily provide information regarding certain related party transactions .
" we welcome this request , " said kenneth l . lay , enron chairman and ceo . " we will cooperate fully with the sec and look forward to the opportunity to put any concern about these transactions to rest . in the meantime , we will continue to focus on our core businesses and on serving our customers around the world . "
enron noted that its internal and external auditors and attorneys reviewed the related party arrangements , the board was fully informed of and approved these arrangements , and they were disclosed in the company ' s sec filings . " we believe everything that needed to be considered and done in connection with these transactions was considered and done , " lay said .
enron is one of the world ' s leading energy , commodities and services companies . the company markets electricity and natural gas , delivers energy and other physical commodities , and provides financial and risk management services to customers around the world . enron ' s internet address is www . enron . com . the stock is traded under the ticker symbol " ene . "
end
' msceafeaalxfffe .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares slide as sec seeks information on deals with cfo ' s partnership
10 / 22 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones & company , inc . )
houston - - shares of enron corp . slumped monday after the energy - trading concern said the securities and exchange commission has asked for information about " certain related party transactions , " including those between enron and a limited partnership organized by its chief financial officer .
enron promised to cooperate fully with the sec request and said in a prepared statement that it " welcomes " the request and looks forward to put " any concern about these transactions to rest . "
in 4 p . m . edt trading on the new york stock exchange , enron ( ene ) shares fell $ 5 . 40 , or 21 % , to $ 20 . 65 .
last week the wall street journal reported that a limited partnership organized by andrew fastow , enron ' s chief financial officer , made millions in profits in transactions with the firm . the story cited information reported in an internal partnership document .
enron also said last week it will repurchase up to 55 million shares that it had issued as part of transactions with ljm 2 co - investment lp , the limited partnership created by mr . fastow .
in addition , enron took a $ 1 . 01 billion charge in the third quarter , mostly connected with write - downs of bad investments , producing a loss of $ 618 million , or 84 cents a share . excluding charges , income was $ 393 million , or 43 cents a share , in the quarter .
the charge covers a wide range of items including costs related to the limited partnerships that were , until recently , by mr . fastow .
the company said the costs connected with the partnerships total $ 35 million and involve the early termination of " certain structured finance arrangements . "
the partnerships were set up two years ago , and while the company maintains that they are perfectly proper , some have suggested that it is a conflict of interest for enron ' s chief financial officer to be involved in a partnership that was looking to purchase enron assets , the journal reported .
the energy company said its auditors reviewed the arrangements and its board was fully informed and approved the deals , which were disclosed in sec filings .
" we believe everything that needed to be considered and done in connection with these transactions was considered and done , " enron chairman and chief executive kenneth lay said on monday .
separately , an enron shareholder filed a derivative lawsuit in texas court alleging enron ' s board breached its fiduciary duties to the company by allowing mr . fastow to create and run certain limited partnerships .
a law firm representing the unnamed shareholder said in a prepared statement that enron ' s board lost over $ 35 million by allowing mr . fastow to run these partnerships , which engaged in transactions with enron and presented a conflict of interest .
the suit alleges that the limited partnerships bought enron assets , permitting mr . fastow to use his inside knowledge of the company ' s financial condition to earn millions of dollars .
- - bill platt of dow jones newswires contributed to this report .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron says sec asks about related - party transactions ( update 8 )
2001 - 10 - 22 17 : 10 ( new york )
enron says sec asks about related - party transactions ( update 8 )
( adds in sixth paragraph that analyst estimates dissolving
affiliated companies would cost $ 3 billion . )
houston , oct . 22 ( bloomberg ) - - enron corp . ' s shares fell 21
percent after the houston - based company said the securities and
exchange commission requested information on partnerships run by
chief financial officer andrew fastow and other executives .
enron , the largest energy trader , created partnerships and
other affiliated companies to buy and sell assets such as power
plants to lower the debt on its books . an investor sued enron ' s
board wednesday , saying two partnerships cost the company $ 35
million and fastow ' s leadership of them was a conflict of
interest .
investors today said they were concerned that enron may be
forced to dismantle the affiliated companies by paying off the
owners in cash or stock . chief executive ken lay said last week he
may be have to ` ` unravel ' ' agreements that created the companies
if enron ' s debt ratings fall too far .
` ` we need confidence their long - term credit rating won ' t go
below investment grade , ' ' said roger hamilton , an analyst at john
hancock ' s value funds , which own 600 , 000 enron shares .
enron reduced shareholders ' equity by $ 1 . 2 billion when it
repurchased 55 million shares of two such partnerships controlled
by fastow , ljm cayman and lmj 2 co - investment , the wall journal
reported last week .
dismantling more of the affiliated companies and partnerships
would cost enron or its shareholders as much as $ 3 billion , ray
niles , a salomon smith barney analyst , wrote in a report to
investors today .
enron shares fell $ 5 . 40 to $ 20 . 65 . they touched $ 19 . 67 during
the day ' s trading , the lowest level since jan . 15 , 1998 .
shares plunge
the stock has fallen 75 percent this year amid concerns about
failed investments in trading of space on fiber - optic
communications networks and a water company , and the resignation
of jeff skilling as ceo in august after seven months on the job .
while skilling said he resigned for personal reasons ,
investors say his departure led them to question whether the
company was concealing problems , including possible liabilities
from affiliated companies .
on tuesday , enron surprised many investors when it reported a
$ 618 million third - quarter loss , the result of writing off $ 1 . 01
billion in failed investments .
moody ' s investors service placed the company ' s debt on watch
for possible downgrade . the company ' s debt is rated at investment
grade by fitch , standard & poor ' s and moody ' s .
the company received a faxed request for information from the
sec on wednesday asking for information , spokesman mark palmer
said , and will respond ` ` as soon as possible . ' '
` ` we will cooperate fully with the sec and look forward to
the opportunity to put any concern about these transactions to
rest , ' ' lay , who is also enron ' s chairman , said in a statement .
dilution fears
enron has formed at least 18 companies to serve as financing
vehicles for its projects , based on filings with the texas
secretary of state . fastow and other enron executives are named as
the controlling partners or the board members in the companies .
some have bought enron assets such as power plants , removing
the debt for those projects from enron ' s books . that allows enron
to keep cash earned from the main trading business from supporting
what it views as secondary businesses , standard & poor ' s debt
analyst todd shipman said .
enron brokers trades of electricity , natural gas and other
commodities as well as owns power plants and natural - gas
pipelines .
dismantling the affiliates would be costly . whitewing
management , an affiliated company that has bought 14 enron power
plants and lists fastow as managing director , holds 250 , 000
preferred shares of enron .
enron may have to convert the preferred shares to common
stock if share prices fall below a certain level and the credit
rating drops below investment grade , according to company filings .
that would dilute the value of common shareholders ' investment .
` ` the concern is how many of these dilutive structures are
out there ? ' ' shipman said . ` ` investors are worried they might have
to share their enron earnings with a lot more people than they
originally thought . ' '
worrisome financing
enron ' s auditors and attorneys reviewed the company ' s
` ` related party arrangements , ' ' the board approved them , and they
were disclosed in sec filings , enron said in its statement .
that hasn ' t eased concerns . the reduction of shareholder
equity by $ 1 . 2 billion from the ljm partnerships is reason to
worry about enron ' s other financing vehicles , wrote niles , the
salomon analyst . enron also may take another $ 2 . 4 billion in
losses from investments in the dabhol power plant in india and
projects in south america , he wrote .
enron ' s 8 percent coupon bonds due in 2005 fell $ 34 per
$ 1 , 000 face value to be offered at $ 1 , 022 today from $ 1 , 056 on
friday , traders said . yield on the debt rose to 7 . 33 percent from
6 . 33 percent .
based on bloomberg composite ratings , most of enron ' s long -
term debt is rated at bbb 2 and bbbl , two or three levels above
investment grade .
fastow continues to work , and enron hasn ' t punished him ,
palmer said . fastow declined to be interviewed , spokeswoman karen
denne said . sec spokesman john heine declined to comment on the
agency ' s request to enron .
` ` we believe everything that needed to be considered and done
in connection with these transactions was considered and done , ' '
lay said in the statement .
uniprime signs letter of intent for wind energy park project
10 / 22 / 2001
business wire
( copyright ( c ) 2001 , business wire )
apache junction , ariz . - - ( business wire ) - - oct . 22 , 2001 - - uniprime capital corporation inc . ( nqb : uprc ) announced today that it has signed a letter of intent ( loi ) with jessel enterprises inc . of los angeles for a partial interest in a wind park ground lease .
this ground lease , owned by enron wind development corp . , a subsidiary of enron corp . ( nyse : ene ) , represents in excess of 3 , 000 acres of prime natural land in the tehachapi valley , possessing an extremely high - quality wind source . the output at this particular location is rated at approximately 64 megawatts , and can service roughly 40 , 000 residential customers . revenue generation from the jessel enterprises wind park is estimated to be $ 96 million per year .
uniprime capital corporation president and ceo randy russo stated , " we are very pleased to have this opportunity to assist in providing a clean , environmentally favored alternative power supply to california consumers , especially in view of the recent crisis condition that many west coast markets have been experiencing . "
additional information about this particular wind park project , and the industry in general , can be found at the american wind energy association ' s website at http : / / www . awea . org . uniprime capital corporation is a publicly traded investment holding company trading under the symbol uprc .
statements contained in this document that are not historical in nature are forward - looking within the meaning of the private securities litigation reform act of 1995 . forward - looking statements are subject to risks and uncertainties that may cause future results to differ materially from those set forth in such forward - looking statements . uniprime capital corporation undertakes no obligation to update forward - looking statements to reflect events or circumstances after the date hereof . such risks and uncertainties with respect to uniprime capital corporation include , but are not limited to , its ability to successfully implement internal performance goals , performance issues with suppliers , regulatory issues , competition , the effect of weather , exposure to environmental issues and liabilities , variations in material costs and general and specific economic conditions .
enron mentions
stocks close higher as investors cheer earnings news
dow jones business news - 10 / 22 / 01
enron faces holder suit from fincl chief pacts
dow jones news service - 10 / 22 / 01
shapiro haber ag edwards downgrades
afx news - 10 / 22 / 01
enron corp . information requested by sec .
regulatory news service - 10 / 22 / 01
enron shares slide as sec seeks information on deals with cfo ' s partnership
dow jones business news - 10 / 22 / 01
enron says sec asks about related - party transactions ( update 8 )
bloomberg - 10 / 22 / 01
uniprime signs letter of intent for wind energy park project
business wire - 10 / 22 / 01
stocks close higher as investors cheer earnings news
by peter edmonston
10 / 22 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones & company , inc . )
the wall street journal online
stocks rallied sharply monday despite the widening anthrax scare , as a batch of better - than - expected quarterly earnings reports cheered investors .
the dow jones industrial average gained 172 . 92 , or 1 . 9 % , to close at 9377 . 03 after gaining 40 . 89 points friday . the nasdaq composite index rose 36 . 75 , or 2 . 2 % , to 1708 . 06 after climbing 18 . 59 points in the previous session .
other major stock indexes gained ground monday . the standard & poor ' s 500 - stock index added 16 . 42 to 1089 . 90 , the new york stock exchange composite index rose 7 . 13 to 561 . 45 , and the russell 2000 index gained 4 . 80 to 430 . 50 .
bonds were mixed and the dollar strengthened .
the stock market ' s gains were tempered briefly by news that a postal worker in washington , d . c . , was diagnosed with anthrax contracted by inhalation . additionally , two other postal workers in washington have died and their deaths are being investigated to determine if they died of that same ailment .
but stocks took the anthrax reports in stride , suggesting a new and surprising level of confidence among market participants , some analysts said monday . " the market is really shrugging off this news , " said mark donahoe , a managing director at u . s . bancorp piper jaffray .
upbeat earnings news from american express , released monday afternoon , seemed to give stocks an additional lift .
investors may be shifting their focus away from concerns about anthrax exposure and u . s . military maneuvers in afghanistan to take a closer look at quarterly earnings results , said steven kroll sr . , managing director at monness , crepsi & hardt .
the uncertainty on the global front " looks like it is going to be a long , drawn - out affair , " mr . kroll said . " i think stocks will revert back to being earnings - driven . "
although dismal by ordinary standards , last week ' s flood of quarterly earnings reports got a reasonably upbeat reception from investors , who seem to have approached them with extremely low expectations . " the markets acted pretty well last week in light of some very ugly earnings , " said mr . donahoe of u . s . bancorp . that resilience might be giving hope to investors this week , he added .
still , investors will be carefully sifting through quarterly results in the coming week to get a fix on how the fourth quarter is shaping up , mr . kroll argued .
third - quarter earnings showed several pockets of strength on monday , with big companies such as minnesota mining and manufacturing and u . s . steel posting results that met or topped analysts ' estimates .
the dow industrials got an additional boost shortly after 2 p . m . edt when index component american express reported earnings that , excluding certain items , beat wall street previously lowered estimates .
the financial - services concern posted net income of $ 298 million , or 22 cents a share , down 60 % from $ 737 million , or 54 cents a share , a year earlier . excluding charges related to a corporate restructuring and the september 11 attacks , american express said it would have earned $ 595 million , or 45 cents a share , for the latest quarter . analysts had been expecting earnings of 30 cents a share , according to thomson financial / first call .
shares of american express surged after the quarterly earnings release , closing up 3 . 4 % at $ 30 . 32 .
chip stocks helped lead the nasdaq composite higher , with the philadelphia semiconductor index gaining 5 . 4 % . the rally seemed to be a continuation of friday ' s gains in the sector , sparked by positive earnings news from kla - tencor .
u . s . steel , the nation ' s no . 1 steelmaker , said it swung to a third - quarter loss from a profit a year earlier , hurt by oversupply and a weak economy . but excluding charges related to the closure of one mill and damage at another , u . s . steel said its loss was much narrower than what was forecast by analysts surveyed by thomson financial / first call . shares of u . s . steel rose 9 . 7 % to $ 14 . 74 .
investors also sent 3 m shares nearly 5 % higher after the maker of chemical and adhesive products squeaked by wall street estimates , despite a 21 % decline in net income . and oil producers conoco and usx - marathon group handily beat analysts ' forecasts .
but not all the earnings news was cheery . local phone company sbc communications recorded net income that was slightly below estimates . shares of sbc , a component of the dow industrials , fell 5 . 1 % to $ 41 . 40 .
meanwhile , the outlook for corporate profits in the fourth quarter seems discouraging , some analysts noted . on monday , 3 m guided wall stret ' s earnings expectations lower for the upcoming quarter , and a top executive at u . s . steel told analysts that the company ' s fourth quarter would be " difficult . "
companies " are meeting third quarter expectations , but they are talking down the fourth quarter , " said mr . kroll of monness crespi & hardt . he said that some of the rise in monday ' s markets might be a carryover from friday ' s buying activity related to the expiration of u . s . stock option and index option contracts , an event known as " double witching . "
one of the hardest - hit stocks on monday was enron , an energy concern that said that the securities and exchange commission was seeking information about certain complex transactions it undertook with a limited partnership organized by its chief financial officer . shares of enron plunged 21 % to $ 20 . 65 .
overseas , stocks closed higher . london ' s financial times - stock exchange 100 - share index gained 1 . 1 % , while frankfurt ' s xetra dax index rose 2 % . earlier in the day , japan ' s nikkei 225 average closed with a gain of 0 . 3 % , but hong kong ' s hang seng index ended 0 . 3 % lower .
in economic news , the conference board reported that its index of leading indicators for the month fell 0 . 5 % in september , matching the estimates of economists surveyed by thomson global markets . the index - - a composite of measurements aimed at forecasting likely changes in the economy - - included some data gathered after the sept . 11 attacks .
the decline , which was the index ' s largest one - month drop since january 1996 , confirmed that the widespread weakness in the u . s . economy is deepening , the conference board said . falling stock prices and rising initial unemployment claims were two of the index components that contributed most negatively to the september reading .
in august , the leading - indicators index slipped 0 . 1 % , less than the previous estimate of a 0 . 3 % decline . even so , the back - to - back declines paint a bleak economic picture , said conference board economist ken goldstein .
the two - month decline in the index suggests that the already - weak economy is likely to remain weak into next year , mr . goldstein said . the overall reading from these numbers indicates that manufacturing and services are experiencing a significant slowdown .
in major u . s . market action :
stocks rose . on the big board , where 1 . 09 billion shares were traded , 1 , 813 stocks rose and 1 , 291 fell . on the nasdaq , 1 . 49 billion shares changed hands .
bonds were mixed . the 10 - year treasury note rose less than 1 / 16 point monday , or 62 . 5 cents for each $ 1 , 000 invested . the yield , which moves inversely to its price , fell to 4 . 618 % . the 30 - year bond fell 1 / 16 point to yield 5 . 364 % .
the dollar rose . the dollar bought 122 . 56 yen , compared with 121 . 20 yen late friday . the euro traded at 89 . 18 u . s . cents , down from 89 . 84 cents late friday .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron faces holder suit from fincl chief pacts
10 / 22 / 2001
dow jones news service
( copyright ( c ) 2001 , dow jones dow jones newswires ; 201 - 938 - 5400
copyright ? 2000 dow jones & company , inc . all rights reserved .
shapiro haber & urmy files class action on behalf of purchasers of enron corporation stock ( nyse : ene ) in the period from july 13 , 2001 through october 16 , 2001
10 / 22 / 2001
pr newswire
( copyright ( c ) 2001 , pr newswire )
boston , oct . 22 / prnewswire / - - the law firm of shapiro haber & urmy llp has filed a class action suit alleging securities fraud in the united states district court for the southern district of texas ( houston division ) , 515 rusk ave . , houston , texas 77002 , against enron corporation ( " enron " ) ( nyse : ene ) and certain of its officers and directors .
the case was filed on behalf of all purchasers of the common stock of enron during the period from july 13 , 2001 through october 16 , 2001 , inclusive ( the " class period " ) .
the complaint alleges that the defendants violated section 10 ( b ) of the securities exchange act of 1934 ( " the exchange act " ) , and rule 10 b - 5 promulgated thereunder , and that defendants ' wrongful conduct artificially inflated the price of enron common stock during the class period . the complaint charges that the defendants misrepresented and concealed material facts concerning the company ' s financial transactions with two partnerships established by enron ' s chief financial officer , which resulted in substantial losses to enron and a reduction in shareholders ' equity of over $ 1 billion . the price of enron ' s common stock plummeted over 20 % in just three trading days following disclosure of the financial losses resulting from enron ' s dealings with these partnerships .
plaintiff seeks to recover damages suffered by class members and is represented by the law firm of shapiro haber & urmy llp , which has successfully prosecuted numerous securities class actions on behalf of defrauded investors . more information about the firm and its qualifications is available on the firm ' s website at www . shulaw . com .
if you are a member of the class described above , you may wish to join the action . you may move the court to serve as a lead plaintiff no later than december 21 , 2001 .
if you would like a copy of the complaint , would like to discuss joining this action as a lead plaintiff , or would like to inform us that you are a member of the proposed class , please contact thomas g . shapiro , esq . or liz hutton , paralegal , shapiro haber & urmy llp , 75 state street , boston , ma 02109 , ( 800 ) 287 - 8119 , fax at ( 617 ) 439 - 0134 , or e - mail at cases @ shulaw . com .
make your opinion count - click here
/ contact : thomas g . shapiro , esq . or liz hutton , paralegal , shapiro haber & urmy llp , + 1 - 800 - 287 - 8119 , cases @ shulaw . com / 16 : 54 edt
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron board approved partnerships run by chief financial officer
10 / 22 / 2001
pr newswire
( copyright ( c ) 2001 , pr newswire )
new york , oct . 22 / prnewswire / - - an enron ( nyse : ene ) shareholder has filed a derivative suit in texas state court which charges that enron ' s board of directors breached their fiduciary duties to the company by allowing its cfo , andrew fastow to create and run certain limited partnerships . the enron board lost the company over $ 35 million by allowing fastow to run these partnerships , which engaged in transactions with enron and presented a clear conflict of interest for the enron cfo .
in addition to other transactions , the limited partnerships bought enron assets , permitting fastow to use his inside knowledge of the company ' s financial condition to earn millions of dollars for himself and the limited partnerships . on october 16 , 2001 the company announced that it would take a $ 35 million charge relating to the limited partnerships . it was also revealed that the company had to repurchase 55 million of its shares in order to unwind its involvement in the partnerships , thereby reducing the company ' s shareholder equity by $ 1 . 2 billion .
on october 22 , 2001 , the company announced that the sec recently requested additional information regarding these limited partnerships .
if you would like additional information regarding this lawsuit , you may contact murielle steven walsh at pomerantz haudek block grossman & gross llp , new york , new york , 888 - 476 - 6529 ( ( 888 ) 4 - pomlaw ) or mjsteven @ pomlaw . com .
make your opinion count - click here
/ contact : murielle steven walsh , esq . of pomerantz haudek block grossman & gross llp , + 1 - 888 - 476 - 6529 ( + 1 - 888 - 4 - pomlaw ) , mjsteven @ pomlaw . com / 15 : 41 edt
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : update 3 - sec looks into enron deals , stock slides 20 pct .
by david howard sinkman
10 / 22 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 22 ( reuters ) - shares of enron corp . slumped more than 20 percent on monday after it said u . s . regulators are looking into company transactions , another blow to a company whose chief executive resigned in august .
a spokesman for north america ' s biggest buyer and seller of natural gas and electricity declined to discuss an inquiry by the u . s . securities exchange commission , but said it was cooperating . the sec also declined to outline details of its inquiry .
investor confidence in the company has been rocked by reports from the wall street journal about its relationship with two limited partnerships that were run until recently by enron ' s chief financial officer , andrew fastow . the company also reported last week its first quarterly loss in more than four years , and took $ 1 . 01 billion in charges and writedowns on ill - fated investments .
problems at enron surfaced two months ago when ceo jeff skilling resigned after only six months at the helm .
enron shares declined $ 5 . 49 , or 21 percent , to $ 20 . 56 in monday afternoon trade on the new york stock exchange , shaving off almost $ 4 . 2 billion of its market capitalization . the stock , the biggest decliner by percentage loss on the nyse , fell as much as 22 . 8 percent on monday , when it opened at its lowest level since september 1998 .
shares declined 23 percent last week after the journal ran its first story about the limited partnerships on wednesday .
enron declined to comment on whether the sec ' s inquiry into " certain related party transactions " involved the partnerships .
" related party transactions " is the heading used by enron in its 1999 and 2000 annual reports to discuss dealings with its limited partnerships , ljm cayman lp and the larger ljm 2 co - investment lp , which engaged in complex hedging transactions involving company assets worth hundreds of millions of dollars .
fastow severed his ties to the partnerships in june . ljm was set up in june 1999 for energy - related investments , and ljm 2 in december 1999 for energy - and communication - related investments .
the journal reported $ 35 million of its third - quarter loss of $ 638 million were connected with the limited partnerships
curt launer , an analyst at credit suisse first boston , said investors should question enron ' s use of real value accounting when the value of certain assets , " most notably in telecommunications , " have declined precipitously .
" investors have had several opportunities to question enron ' s credibility and at each of those turns the share price has declined , " launer said .
some analysts , though , cautioned against assuming fire when there might only be smoke .
" this is an inquiry , not an investigation , and i cannot imagine enron ' s attorneys or accountants would allow it do to something illegal , " said merrill lynch analyst donato eassey .
" it ' s easy for the market to kick a company when its down , but these challenges do not last for a solid company , and we think enron is one . "
shares in the company are down 75 percent this year .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares plunge 20 percent after acknowledging sec inquiry
10 / 22 / 2001
associated press newswires
copyright 2001 . the associated press . all rights reserved .
houston ( ap ) - shares of enron corp . plunged more than 20 percent monday after the energy trading giant said the securities and exchange commission had sought information company ' s transactions with limited partnerships , which were managed by an enron senior officer .
in a statement , enron said it had provided the regulatory agency with information in response to an inquiry last week .
" we welcome this request , " enron chairman and chief executive officer kenneth l . lay said in a statement monday . " we will cooperate fully with the sec and look forward to the opportunity to put any concern about these transactions to rest . "
investors were upset by the news , however , sending shares of enron down dlrs 5 . 30 to dlrs 20 . 75 in heavy trading on the new york stock exchange .
the transactions took place in 1999 and 2000 , according to houston - based enron ' s 2000 annual report . they resulted in a dlrs 16 million pre - tax gain to enron in 1999 and a dlrs 36 million loss in 2000 .
enron officials declined to provide details about the transactions or name the limited partnerships , instead referring questions to a section of the annual report on related party transactions .
" enron entered into transactions with ( limited partnerships ) to hedge certain merchant investments and other assets , " according to the section in the annual report .
enron spokesman mark palmer said the sec first contacted enron last week and described the request is an " informal inquiry . "
" this is not an investigation , " he said . " we see the request as an opportunity to put this issue behind us . "
sec spokesman john heine said he could not comment on the filings . " we can ' t confirm or deny that type of activity , " heine said .
the electricity marketer and natural gas provider says both internal and external auditors and attorneys reviewed the related party arrangements , the company ' s board was fully informed of and approved the arrangements , and they were disclosed in the company ' s sec filings .
copyright ? 2000 dow jones ag edwards downgrades
10 / 22 / 2001
afx news
( c ) 2001 by afp - extel news ltd
new york ( afx ) - shares of enron corp were down sharply in late morning trade , after the securities and exchange commission requested the company to provide information on certain related - party transactions , prompting ag edwards to downgrade the stock to ' hold ' from ' buy ' , dealers said .
at 11 . 10 am , enron was down 4 . 29 usd , or 16 . 47 pct , at 21 . 76 . the djia was up 57 . 57 points at 9 , 261 . 68 , and the s & p 500 composite index was up 5 . 57 points at 1 , 079 . 05 .
in a statement this morning , enron confirmed that the sec had requested documents , and said it would " cooperate fully " with the commission .
however , the company did not give any details of the transactions concerned or of the reasons behind the sec ' s request .
according to ag edwards analyst mike heim , enron " significantly reduced " its equity to unroll a partnership arrangement with a partially - owned subsidiary formerly run by enron ' s chief financial officer .
" this arrangement , which was not discussed in past sec filings , has led to a growing distrust of the company by the financial community .
" in our opinion , the market is most likely overreacting to the news being disseminated over the last few days .
" however , we can give no assurances that all the problems at enron have been fully disclosed , " heim said .
in its statement this morning , enron said although its internal and external auditors and attorneys have reviewed the related - party arrangements , adding that the board was " fully informed of and approved these arrangements " , which were disclosed in the company ' s sec filings .
" we believe everything that needed to be considered and done in connection with these transactions was considered and done , " said chief executive kenneth lay .
ng / gc for more information and to contact afx : www . afxnews . com and www . afxpress . com
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron corp . information requested by sec .
10 / 22 / 2001
regulatory news service
( c ) 2001
intnth 22 october 2001
enron announces sec request , pledges cooperation
houston - enron corp . ( nyse : ene ) announced today that the securities and exchange commission has requested that enron voluntarily provide information regarding certain related party transactions .
" we welcome this request , " said kenneth l . lay , enron chairman and ceo . " we will cooperate fully with the sec and look forward to the opportunity to put any concern about these transactions to rest . in the meantime , we will continue to focus on our core businesses and on serving our customers around the world . "
enron noted that its internal and external auditors and attorneys reviewed the related party arrangements , the board was fully informed of and approved these arrangements , and they were disclosed in the company ' s sec filings . " we believe everything that needed to be considered and done in connection with these transactions was considered and done , " lay said .
enron is one of the world ' s leading energy , commodities and services companies . the company markets electricity and natural gas , delivers energy and other physical commodities , and provides financial and risk management services to customers around the world . enron ' s internet address is www . enron . com . the stock is traded under the ticker symbol " ene . "
end
' msceafeaalxfffe .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron shares slide as sec seeks information on deals with cfo ' s partnership
10 / 22 / 2001
dow jones business news
( copyright ( c ) 2001 , dow jones & company , inc . )
houston - - shares of enron corp . slumped monday after the energy - trading concern said the securities and exchange commission has asked for information about " certain related party transactions , " including those between enron and a limited partnership organized by its chief financial officer .
enron promised to cooperate fully with the sec request and said in a prepared statement that it " welcomes " the request and looks forward to put " any concern about these transactions to rest . "
in 4 p . m . edt trading on the new york stock exchange , enron ( ene ) shares fell $ 5 . 40 , or 21 % , to $ 20 . 65 .
last week the wall street journal reported that a limited partnership organized by andrew fastow , enron ' s chief financial officer , made millions in profits in transactions with the firm . the story cited information reported in an internal partnership document .
enron also said last week it will repurchase up to 55 million shares that it had issued as part of transactions with ljm 2 co - investment lp , the limited partnership created by mr . fastow .
in addition , enron took a $ 1 . 01 billion charge in the third quarter , mostly connected with write - downs of bad investments , producing a loss of $ 618 million , or 84 cents a share . excluding charges , income was $ 393 million , or 43 cents a share , in the quarter .
the charge covers a wide range of items including costs related to the limited partnerships that were , until recently , by mr . fastow .
the company said the costs connected with the partnerships total $ 35 million and involve the early termination of " certain structured finance arrangements . "
the partnerships were set up two years ago , and while the company maintains that they are perfectly proper , some have suggested that it is a conflict of interest for enron ' s chief financial officer to be involved in a partnership that was looking to purchase enron assets , the journal reported .
the energy company said its auditors reviewed the arrangements and its board was fully informed and approved the deals , which were disclosed in sec filings .
" we believe everything that needed to be considered and done in connection with these transactions was considered and done , " enron chairman and chief executive kenneth lay said on monday .
separately , an enron shareholder filed a derivative lawsuit in texas court alleging enron ' s board breached its fiduciary duties to the company by allowing mr . fastow to create and run certain limited partnerships .
a law firm representing the unnamed shareholder said in a prepared statement that enron ' s board lost over $ 35 million by allowing mr . fastow to run these partnerships , which engaged in transactions with enron and presented a conflict of interest .
the suit alleges that the limited partnerships bought enron assets , permitting mr . fastow to use his inside knowledge of the company ' s financial condition to earn millions of dollars .
- - bill platt of dow jones newswires contributed to this report .
copyright ( c ) 2001 dow jones & company , inc .
all rights reserved .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron says sec asks about related - party transactions ( update 8 )
2001 - 10 - 22 17 : 10 ( new york )
enron says sec asks about related - party transactions ( update 8 )
( adds in sixth paragraph that analyst estimates dissolving
affiliated companies would cost $ 3 billion . )
houston , oct . 22 ( bloomberg ) - - enron corp . ' s shares fell 21
percent after the houston - based company said the securities and
exchange commission requested information on partnerships run by
chief financial officer andrew fastow and other executives .
enron , the largest energy trader , created partnerships and
other affiliated companies to buy and sell assets such as power
plants to lower the debt on its books . an investor sued enron ' s
board wednesday , saying two partnerships cost the company $ 35
million and fastow ' s leadership of them was a conflict of
interest .
investors today said they were concerned that enron may be
forced to dismantle the affiliated companies by paying off the
owners in cash or stock . chief executive ken lay said last week he
may be have to ` ` unravel ' ' agreements that created the companies
if enron ' s debt ratings fall too far .
` ` we need confidence their long - term credit rating won ' t go
below investment grade , ' ' said roger hamilton , an analyst at john
hancock ' s value funds , which own 600 , 000 enron shares .
enron reduced shareholders ' equity by $ 1 . 2 billion when it
repurchased 55 million shares of two such partnerships controlled
by fastow , ljm cayman and lmj 2 co - investment , the wall journal
reported last week .
dismantling more of the affiliated companies and partnerships
would cost enron or its shareholders as much as $ 3 billion , ray
niles , a salomon smith barney analyst , wrote in a report to
investors today .
enron shares fell $ 5 . 40 to $ 20 . 65 . they touched $ 19 . 67 during
the day ' s trading , the lowest level since jan . 15 , 1998 .
shares plunge
the stock has fallen 75 percent this year amid concerns about
failed investments in trading of space on fiber - optic
communications networks and a water company , and the resignation
of jeff skilling as ceo in august after seven months on the job .
while skilling said he resigned for personal reasons ,
investors say his departure led them to question whether the
company was concealing problems , including possible liabilities
from affiliated companies .
on tuesday , enron surprised many investors when it reported a
$ 618 million third - quarter loss , the result of writing off $ 1 . 01
billion in failed investments .
moody ' s investors service placed the company ' s debt on watch
for possible downgrade . the company ' s debt is rated at investment
grade by fitch , standard & poor ' s and moody ' s .
the company received a faxed request for information from the
sec on wednesday asking for information , spokesman mark palmer
said , and will respond ` ` as soon as possible . ' '
` ` we will cooperate fully with the sec and look forward to
the opportunity to put any concern about these transactions to
rest , ' ' lay , who is also enron ' s chairman , said in a statement .
dilution fears
enron has formed at least 18 companies to serve as financing
vehicles for its projects , based on filings with the texas
secretary of state . fastow and other enron executives are named as
the controlling partners or the board members in the companies .
some have bought enron assets such as power plants , removing
the debt for those projects from enron ' s books . that allows enron
to keep cash earned from the main trading business from supporting
what it views as secondary businesses , standard & poor ' s debt
analyst todd shipman said .
enron brokers trades of electricity , natural gas and other
commodities as well as owns power plants and natural - gas
pipelines .
dismantling the affiliates would be costly . whitewing
management , an affiliated company that has bought 14 enron power
plants and lists fastow as managing director , holds 250 , 000
preferred shares of enron .
enron may have to convert the preferred shares to common
stock if share prices fall below a certain level and the credit
rating drops below investment grade , according to company filings .
that would dilute the value of common shareholders ' investment .
` ` the concern is how many of these dilutive structures are
out there ? ' ' shipman said . ` ` investors are worried they might have
to share their enron earnings with a lot more people than they
originally thought . ' '
worrisome financing
enron ' s auditors and attorneys reviewed the company ' s
` ` related party arrangements , ' ' the board approved them , and they
were disclosed in sec filings , enron said in its statement .
that hasn ' t eased concerns . the reduction of shareholder
equity by $ 1 . 2 billion from the ljm partnerships is reason to
worry about enron ' s other financing vehicles , wrote niles , the
salomon analyst . enron also may take another $ 2 . 4 billion in
losses from investments in the dabhol power plant in india and
projects in south america , he wrote .
enron ' s 8 percent coupon bonds due in 2005 fell $ 34 per
$ 1 , 000 face value to be offered at $ 1 , 022 today from $ 1 , 056 on
friday , traders said . yield on the debt rose to 7 . 33 percent from
6 . 33 percent .
based on bloomberg composite ratings , most of enron ' s long -
term debt is rated at bbb 2 and bbbl , two or three levels above
investment grade .
fastow continues to work , and enron hasn ' t punished him ,
palmer said . fastow declined to be interviewed , spokeswoman karen
denne said . sec spokesman john heine declined to comment on the
agency ' s request to enron .
` ` we believe everything that needed to be considered and done
in connection with these transactions was considered and done , ' '
lay said in the statement .
uniprime signs letter of intent for wind energy park project
10 / 22 / 2001
business wire
( copyright ( c ) 2001 , business wire )
apache junction , ariz . - - ( business wire ) - - oct . 22 , 2001 - - uniprime capital corporation inc . ( nqb : uprc ) announced today that it has signed a letter of intent ( loi ) with jessel enterprises inc . of los angeles for a partial interest in a wind park ground lease .
this ground lease , owned by enron wind development corp . , a subsidiary of enron corp . ( nyse : ene ) , represents in excess of 3 , 000 acres of prime natural land in the tehachapi valley , possessing an extremely high - quality wind source . the output at this particular location is rated at approximately 64 megawatts , and can service roughly 40 , 000 residential customers . revenue generation from the jessel enterprises wind park is estimated to be $ 96 million per year .
uniprime capital corporation president and ceo randy russo stated , " we are very pleased to have this opportunity to assist in providing a clean , environmentally favored alternative power supply to california consumers , especially in view of the recent crisis condition that many west coast markets have been experiencing . "
additional information about this particular wind park project , and the industry in general , can be found at the american wind energy association ' s website at http : / / www . awea . org . uniprime capital corporation is a publicly traded investment holding company trading under the symbol uprc .
statements contained in this document that are not historical in nature are forward - looking within the meaning of the private securities litigation reform act of 1995 . forward - looking statements are subject to risks and uncertainties that may cause future results to differ materially from those set forth in such forward - looking statements . uniprime capital corporation undertakes no obligation to update forward - looking statements to reflect events or circumstances after the date hereof . such risks and uncertainties with respect to uniprime capital corporation include , but are not limited to , its ability to successfully implement internal performance goals , performance issues with suppliers , regulatory issues , competition , the effect of weather , exposure to environmental issues and liabilities , variations in material costs and general and specific economic conditions .