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Tuesday, 26 March, 2002, 05:30 GMT
Enron sells UK water firm
Wessex Water's Durleigh reservoir
At a stroke, YTL gains millions of British customers
Malaysian energy group YTL Power has beaten a consortium of UK banks to buy Wessex Water, the British utility arm of failed energy trader Enron.

YTL offered 1.2bn ($1.8bn) - roughly half cash, half debt - for Wessex Water, trumping a rival offer from a consortium led by Royal Bank of Scotland and Abbey National.

Wessex was put up for sale at the end of last year, as part of a wholesale programme of asset sales in the wake of Enron's bankruptcy.

The proceeds will pay off almost all the debts of Azurix, the Enron subsidiary that controlled Wessex Water, but will leave almost nothing for Enron creditors.

Last-minute deal

YTL's successful bid came as a surprise. The Royal Bank of Scotland team had been given preferential status, but the Malaysian firm upped its offer on Monday.

According to media reports, some of the bidding banks were concerned about the details of Wessex's finances, and in particular its remaining links with Enron.

YTL Power is a subsidiary of YTL Corp, which has businesses ranging from power generation to cement making and hotels.

This deal represents YTL's first major step into the European utility market, giving the firm 1.2 million water and 2.5 million sewerage customers, mainly in the south west of England.

Business concluded

With its debts paid off, Azurix will now be wound up.

The firm paid 1.4bn for Wessex Water in 1998, and its outstanding bonds had a face value of around $1.7bn just before Enron's bankruptcy.

The sale has been approved by the boards of Azurix and YTL, and is expected to be completed in about two months, pending approval from the US Bankruptcy Court.

Wessex Water Chairman Colin Skellet
"It gives an opportunity for employees to become investors"
See also:

23 Mar 02 | Business
Enron probe focuses on White House
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