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Tuesday, 12 February, 2002, 08:08 GMT
Enron resurrects trading arm
Trader preparing to start trading at UBS Warburg Energy
The most high-profile part of Enron's empire has resumed trading under the banner of UBS Warburg.

The North American energy trading business - including the famed internet arm - spearheaded the company's rapid growth, and could become its saviour.

Everyone has good memories of Enron's trading capabilities...

John Olsen
Energy analyst

EnronOnline was relaunched, under the name, by the investment bank on Monday.

The firm's new owners would not say how the first day of business had gone, but some in the industry fear that other trading firms may shy away, because of the scandal surrounding Enron.

The energy giant - once one of the world's most prestigious companies - filed for bankruptcy after admitting it had inflating its profits through using rogue accounting practices.

Clean slate

UBS Warburg has been handed a clean slate, and will not assume any of Enron's liabilities or trading positions.

While the Swiss bank did not pay any money to acquire Enron's trading unit, it has agreed to give the energy giant one third of the profits it makes.

...but everyone has bad memories of getting stuck with the bankruptcy

John Olsen

But there is a still uncertainty about how the new trading venture will be received in the market.

"The prospects are coloured by the fact that Enron went down in such a big way," said John Olsen, an energy analyst in Houston who has also been giving evidence at one of the Congressional hearings.

"Everyone has relatively good memories of Enron's trading capabilities, but everyone has bad memories of getting stuck with the bankruptcy," he told BBC Radio's Today programme.

Saved jobs

Enron had previously enjoyed an excellent reputation as a trading partner.

And the strong credit rating of UBS Warburg may also help win the confidence of other players.

"Even at the end, when Enron was in a death spiral, the trading company was still making money," Steve Larson, director of the California Energy Commission told BBC Radio's Wake Up To Money programme.

Up to 150 Enron traders, plus support staff, have been kept on to run the new operation for UBS Warburg.

Greg Whalley, who resigned as Enron's former president and chief operating officer last week, will become managing director of the new venture.

Rescue plan

Enron was once the biggest buyer and seller of natural gas in the world, and took a prominent position in the trading of both gas and electricity.

Global energy trading accounted for 90% of Enron's $101bn revenues in 2000.

Enron is trying to salvage parts of its business as it restructures itself under protection from its creditors.

Several congressional committees are trying to establish what went wrong at Enron, but the firm's former chief executive and chairman Kenneth Lay is refusing to give evidence in order to avoid incriminating himself.

John Olsen
"There are good and bad memories of trading with Enron"
See also:

11 Feb 02 | Business
Former Enron boss refuses to testify
04 Feb 02 | Business
Enron scandal at-a-glance
30 Nov 01 | Business
Enron's internet monster
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