Enron Says It May Partner or Sell Broadband Business
By Reuters
[ from ispworld.com ]
10/17/01
HOUSTON, Oct 16 (Reuters) - Energy giant Enron Corp.said on Tuesday it is reviewing strategic options for its loss-making broadband telecommunications business, which could involve selling the business or finding a partner.
"In addition to us looking at our business on a standalone business, we clearly have entertained some discussions on other possibilities," Chief Executive Officer Ken Lay told Reuters in a telephone interview.
Earlier on Tuesday, Enron reported that one-time charges of $1.01 billion for broadband and other businesses outside its core energy operations pushed the company to a third-quarter net loss of $638 million, its first quarterly loss in more than four years.
Future options for the broadband business include "sale, partnership, all kinds of possibilities" he said.
"We still think over time that it will be a valuable business," Lay said, but for now the broadband market is in a "total meltdown", he added.
Enron's broadband unit, which owns an 18,000 mile network, posted a loss of $80 million for the third quarter, but Lay said losses should be smaller in subsequent quarters.
Enron launched its broadband business last year, predicting that network capacity would one day be traded like natural gas or electricity, but it has recently admitted that it overestimated the market's early potential and has scaled down its operations.
Enron's stock rose by 87 percent last year, driven by enthusiasm for the broadband plans and the success of the EnronOnline Internet energy and commodity trading platform.
But the stock has fallen some 59 percent so far this year as sentiment toward the broadband project soured, CEO Jeff Skilling resigned after only six months in the job and wrangling continued over Enron's stalled Dabhol power plan project in India. |
