UBS Warburg makes winning bid for Enron trading operation

Enron's collapse was sudden Keystone Archive

UBS Warburg has been chosen as the winning bidder for Enron's wholesale energy trading operation at a private auction.

The trading unit was the most important business of Enron, the world’s largest energy merchant before it collapsed at the end of last year. Terms were not disclosed on Friday, but details will be made public on Monday.

According to the German DPA press agency, the bank acquired 51 per cent of Enron’s e-commerce platform, enrononline.com. Ninety per cent of the trader’s turnover, worth $101 billion (SFr167.6 billion), transited via through this platform.

Negotiators apparently hammered out the deal in a marathon session that ended one hour before a hearing at a Manhattan bankruptcy court in New York.

Creditors want details

According to the Wall Street Journal, UBS Warburg, a subsidiary of Switzerland’s largest bank UBS, beat out bids by Citigroup, a major Enron creditor, and BP. Investment and financial services group JP Morgan Chase, another creditor, decided not to submit a bid.

While some creditors have pronounced themselves satisfied with the deal, others are however waiting for details before giving their approval, wanting to know in particular how the deal was reached and how the proceeds will be allocated.

Judge Arthur Gonzales, who is presiding over the bankruptcy proceedings, has already scheduled a hearing for Thursday to announce whether he approves the sale. Creditors will have 10 days to appeal his decision.

Enron accounted for 25 per cent of the world energy trade before going belly up. It differed from its competitors by also placing money on a wide variety of products.

swissinfo with agencies