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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (310)	10/30/2001 4:15:28 PM
From: Softechie	Read Replies (1) \| Respond to of 1433

Enron Down -2: Report Says SEC Probe May Be More Serious 30 Oct 12:11 By Christina Cheddar Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Enron Corp. (ENE) shares Tuesday are continuing to set 52-week lows in heavy volume as credit concerns persist about the Houston energy trading company. Investors also are said to be reacting to news in Tuesday's editions of The Wall Street Journal that a previously reported Securities and Exchange Commission investigation has been moved to the agency's Washington, D.C., office from an office in Fort Worth, Texas. The change is being seen as a sign that the investigation is more serious in nature and "definitely on the front burner," an analyst said. On Monday, credit-rating agency Moody's Investors Service Inc. downgraded Enron's senior unsecured debt and kept the company on review for a possible downgrade in the future. Enron's debt remains two notches above noninvestment grade. If the company's rating falls below investment grade, the company would be in violation of certain financial agreements that could force it to issues millions of shares of stock, diluting the investment of current shareholders. An Enron official wasn't immediately available to confirm the Journal report, or comment on the drop in the company's stock price. The SEC is looking into transactions the company carried out with its then-chief financial officer Andrew Fastow. Enron has repeatedly said the transactions are proper and legal. Enron shares recently traded at $11.24, down $2.56, or 19%. Earlier, the stock set a new low for the year of $11.07, passing the low of $13.55 set Monday. More than 27 million shares have traded hands so far Tuesday, making it the most actively traded stock on the New York Stock Exchange. The stock has dropped nearly 70% in the last two weeks. At these levels, some are beginning to speculate that the company could become a takeover target. However, any potential buyer would have quite a number of questions to ask about the possibility of other financial liabilities tied to the off-balance sheet financing vehicles. J.P. Morgan analyst Anatol Feygin said shares of other energy traders also are being hurt by the credit concerns investors have regarding Enron. But the analyst doesn't believe Enron's core energy trading franchise is being hurt by trading counterparties limiting their exposure to the company. According to Feygin, Enron's liquidity, especially in the short term, is not an issue. However, the analyst said there is "a crisis of perception and confidence." Feygin estimates Enron has about $3.5 billion in cash that either is available or will be available by year-end compared with $575 million of capital commitments. Still, there is no doubt trading partners are closely watching the situation. Mirant Corp. (MIR) Chief Executive Marce Fuller told Dow Jones Newswires Monday that the company continues to review Enron's creditworthiness, as it does all its counterparties, on a daily basis. Duke Energy Corp. (DUK) executives speaking at the Edison Electric Conference in New Orleans Monday echoed Fuller's comments. According to a report published by CreditSights.com, Duke is monitoring the situation closely, but is confident Enron will resolve the situation as early as this week. -By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com (END) DOW JONES NEWS 10-30-01 12:11 PM