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Strategies & Market Trends : IPPs and Merchant Energy Co.s -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (117)	9/21/2002 2:22:59 PM
From: Larry S.	Read Replies (1) \| Respond to of 3358

One of the things that interest me about this sector is the possibility of take-overs and/or mergers. The big oil companies are possible candidates, having the muscle and dollars to do so. Other possibilities would be financial interests, ala Buffett, or other utilities, that want to buy generating facilities and have the ability to handle the debt problems. MIR and ILA are two of the most attractive candidates for acquisition that i can think of. RRI is just behind them (after the REI spin-off) larry

To: KyrosL who wrote (117)	9/21/2002 3:58:25 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 3358

Kyros, last I heard MIR has just about enough liquidity now to pay all the debts that are due by the end of '03. The total due within two years from now is only a little over $3.1B. So, they need to generate another billion-six or so over two years, assuming there is no new financing available to them over that time - a dubious assumption, I think. They still have more asset sales in the works ($100 mil awaiting closing and $700 mil to a billion on the market) and may also be able to further reduce collateral commitments on trading. They've already paid off $1.2 billion of debt since the Enron s#!t hit the fan and it got blown all over the industry, they've slashed CAPEX budgets, and they've significantly reduced operating expenses. And though margins may be squeezed right now, I doubt anyone sees much chance of current market conditions lasting two more years. The market may be pricing it for BK as you say, but if anyone here thinks the market is a good predictor of anything (except, perhaps, recessions), then they haven't been paying attention. Just two and a half years ago, the market was sure the good times would last forever and that there was no limit to the upside. Regards, Bob