Enron Announces Progress in Efforts to Boost Liquidity; Reaffirms Commitment To Merger
With Dynegy; Working With Major Lenders to Restructure Debt Obligations
HOUSTON, Nov 21, 2001 /PRNewswire via COMTEX/ -- Enron Corp. (NYSE: ENE)
announced today that it has closed on the remaining $450 million of a previously
announced $1 billion in secured credit lines from JP Morgan, the
investment-banking arm of JP Morgan Chase & Co., and Salomon Smith Barney, the
investment-banking arm of Citigroup Inc. The $450 million credit facility is
secured by the assets of Enron's Northern Natural Gas Company. A $550 million
credit facility, secured by the assets of Enron's Transwestern Pipeline Company,
closed on Nov. 16. Proceeds are being used to supplement short-term liquidity
and to refinance maturing obligations.
Enron also reaffirmed today its commitment to the merger with Dynegy Inc. "We
continue to believe that this merger is in the best interests of our
shareholders, employees, and lenders," said Kenneth L. Lay, chairman and CEO of
Enron. "It offers the opportunity to create a formidable player in the merchant
energy business with substantial growth prospects and a strong financial
position."
Enron also announced that it is in active discussions with its primary lenders
on a restructuring of its debt obligations to further enhance liquidity. "We
have been in continuous contact with our banks and believe we can identify a
mutually beneficial restructuring to enhance our cash position, strengthen our
balance sheet and address upcoming maturities," said Jeffrey McMahon, executive
vice president and chief financial officer of Enron. "For example, we have been
informed by the lead bank on the facility that the maturity on our $690 million
note payable obligation, disclosed on Nov. 19 in a Form 10-Q filed with the
Securities and Exchange Commission, will be extended to mid-December, providing
the time necessary to restructure the facility. We expect that extension to be
formalized shortly."
"We believe the interests of Chase and Enron's other primary lenders are aligned
in this restructuring effort," said James B. Lee, vice chairman of JP Morgan
Chase & Co. "We will work with Enron and its other primary lenders to develop a
plan to strengthen Enron's financial position up to and through its merger with
Dynegy."
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."
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although Enron believes that its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to differ materially
from those in the forward looking statements herein include Enron's ability to
restructure scheduled maturities of debt; success in marketing natural gas and
power to wholesale customers; and conditions of the capital markets and equity
markets during the periods covered by the forward looking statements.
In connection with the proposed transactions, Dynegy and Enron will file a joint
proxy statement/prospectus with the Securities and Exchange Commission.
Investors and security holders are urged to carefully read the joint proxy
statement/prospectus regarding the proposed transactions when it becomes
available, because it will contain important information. Investors and security
holders may obtain a free copy of the joint proxy statement/prospectus (when it
is available) and other documents containing information about Dynegy and Enron,
without charge, at the SEC's web site at www.sec.gov. Copies of the joint proxy
statement/prospectus and the SEC filings that will be incorporated by reference
in the joint proxy statement/prospectus may also be obtained for free by
directing a request to either: Investor Relations, Dynegy Inc., 1000 Louisiana,
Suite 5800, Houston, TX 77002, Phone: (713) 507-6466, Fax: (713) 767-6652; or
Investor Relations, Enron Corp., Enron Building, 1400 Smith Street, Houston, TX
77002, Phone: (713) 853-3956, Fax: (713) 646-3302.
In addition, the identity of the persons who, under SEC rules, may be considered
"participants in the solicitation" of Dynegy and Enron shareholders in
connection with the proposed transactions, and any description of their direct
or indirect interests, by security holdings or otherwise, are available in an
SEC filing under Schedule 14A made by each of Dynegy and Enron.
Karen Denne
(713) 853-9757
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SOURCE Enron Corp.
CONTACT: Karen Denne of Enron Corp., +1-713-853-9757
URL: www.enron.com
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