BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Wednesday, 9 October, 2002, 12:57 GMT 13:57 UK
Ex-Enron oil unit files for bankruptcy
Oil terminal
EOTT's business is built around oil transportation
EOTT Energy Partners, a large oil distributor affiliated to Enron, has filed for bankruptcy and finally split from its tarnished parent.

The Houston-based firm said its bankruptcy was supported by creditors, and together with $575m (370m) in financing should help the firm get back on its feet as early as next year.

Enron currently owns 37% of EOTT, but the firm has already shed Enron representatives from its board, and regained control of all its assets.

Now, it plans to push through a full legal separation - something that will necessitate both sides renouncing their complex financial claims on each other in return for nominal payments.

'Long-term success'

"The decision to file [for bankruptcy] is not one that we made lightly," the firm said in a statement.

"But the management team, and Board of Directors have determined with our lenders, bondholders and advisors that this is the best way to ensure the long-term success of the organisation.

"EOTT fits the classic model for a successful reorganisation: a company with the potential for strong operating performance that is burdened by too much debt."

EOTT's business is very different from the type of bewildering financial trickery that characterised Enron.

The firm's main assets are crude oil and product pipelines and storage facilities, and it distributes and processes a range of petroleum products for clients around the US and beyond.

Business as usual

EOTT claimed that the filing would not disrupt its day-to-day business, nor should it necessitate the shedding of any staff.

But there remain question marks over the treatment of its shareholders.

Once the bankruptcy plan is confirmed, EOTT's current shareholders will see their investments dissolved and replaced by new equity units under a complex formula.

EOTT shares, which were trading at about $20 just before Enron's troubles became public a year ago, are now worth less than $1.


Latest news

Background

Broad impact

CLICKABLE FACT FILE
See also:

08 Oct 02 | Business
29 Aug 02 | Business
22 Aug 02 | Business
21 Aug 02 | Business
30 May 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes