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Friday, 30 November, 2001, 19:24 GMT
Europe escapes Enron knock
Enron subsidiary Wessex Water's Durleigh reservoir
Enron's Wessex Water: Business as usual
US energy giant Enron's failure has so far resulted in 1,100 UK job losses, but its impact elsewhere in Europe has been limited.

The London-based energy trading centre, which is retaining just 300 staff, was particularly vulnerable because it was financed directly by the near-bankrupt US parent company.

But many of its other European businesses are self-financing, and are expected to weather the storm.

Accountants PricewaterhouseCoopers, appointed to wind down the company's failing European operations, has signalled that it has already excluded many Enron businesses from its investigations.

Utility businesses safe

So far, these include insurance seller Enron Credit, metal trading business Enron Metals, wind power electricity generator Enron Wind, and water provider Wessex Water.

"Wessex Water is ringfenced as a regulated business and operates independently," the company said in a statement.

"Whatever happens to Enron will have no effect on its services or its financial position."

Power plants wholly or partially owned by Enron in the UK, Poland, Italy and Turkey will also be unaffected.

It was feared that Enron's decision early on Friday to suspend its wholesale electricity delivery business in mainland Europe would cause major disruption, but in the end the energy markets operated smoothly.

Enron accounts for around 30% of all wholesale power trading in Germany alone, but most of its customers are large industrial consumers with easy access to alternative suppliers.

Banks unscathed

Fears that Enron's near-collapse would shake investors' confidence in its creditors financial position also proved unfounded.

Major European banks including Germany's Deutsche Bank and Credit Lyonnais in France said they have secured large portions of their outstanding loans to Enron, limiting the potential damage.

Dresdner Bank said Enron owes it $100m, but stressed that any debt write-off would be "sharply lower."

In the Netherlands, ABN Amro said it would write off 100m euros ($90m) if, as expected, Enron declares itself bankrupt next week.

While most major European stock markets closed lower on Friday, this was due mainly to news of a greater than expected economic contraction in the US.

See also:

30 Nov 01 | Business
Enron crisis claims 1,100 UK jobs
30 Nov 01 | Business
Enron 'to file for bankruptcy'
21 Nov 01 | Business
Crisis fears hit Enron shares
09 Nov 01 | Business
Traders wary of Enron's fate
09 Nov 01 | Business
Enron admits inflating profits
01 Nov 01 | Business
Troubles multiply at Enron
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