US banking group Citigroup and Swiss-based UBS Warburg are preparing separate bids to take over the trading operations of the bankrupt energy group Enron, reports said on Monday. Citing unnamed sources, ‘The Wall Street Journal’ and ‘The Financial Times’ said that the investment banks were finalising details of the proposals ahead of an announcement.
The proposals are the result of a hurried attempt by Enron and its largest creditors, which include Citigroup, to find a rescuer for the trading business.
The journal and another report in ‘The Financial Times’ said JP Morgan Chase, which also has large exposure to Enron's bankruptcy, may make a rival offer for Enron's energy trading operations at a later stage.
The energy trading has been the largest generator of cash for Enron, which saw a spectacular meltdown over the past few months.
Enron's filing for Chapter 11 bankruptcy protection marked the largest-ever bankruptcy filing of a US corporation. The once-star stock performer is carrying about $ 13 billion in balance sheet debt, and owes billions more in loans, credit line repayments and payments on energy contracts. Bureau Report