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Enron agrees to sell North American pipelines

/ Source: The Associated Press

Bankrupt Enron Corp. has agreed to sell its most prized remaining assets to a company run by Texas billionaire Oscar Wyatt Jr. for $1.8 billion.

Enron announced Friday it has agreed to sell CrossCountry Energy Corp., which has whole or part interest in three North American natural gas pipelines, to NuCoastal LLC.

The deal must be approved by U.S. Bankruptcy Judge Arthur Gonzalez in New York. NuCoastal would also assume $430 million in debt from the 2,600-mile Transwestern Pipeline in the deal.

Enron interim CEO and restructuring specialist Stephen Cooper said the sale, which has been approved by major creditors, “reflects a stronger market for quality, high-performing energy assets than we had seen two years ago.”

Enron shopped for buyers for the pipelines and a smattering of international pipeline and power assets in late 2002. But lowball offers prompted the company in March 2003 to announce its intention to divide the assets into two companies that would emerge from one of the most expensive and complicated bankruptcies in history.

Enron imploded in late 2001 amid revelations of hidden debt, inflated profits and accounting tricks. The pipeline and power assets have never been part of the bankruptcy.

The CrossCountry sale is targeted to close in December, leaving Enron with just the second company with international assets, Prisma Energy International Inc.

Enron spokeswoman Karen Denne said Gonzalez would approve an auction to let other potential buyers submit higher bids before considering final approval of the sale to NuCoastal.

A spokeswoman for Wyatt didn’t immediately return a call for comment.

Analysts have said CrossCountry’s assets — Transwestern, half-ownership with El Paso Corp. of Citrus Corp., a holding company that owns the 5,000-mile Florida Gas Transmission pipeline, and a less than 2 percent interest in Northern Border Partners — should be reliable providers of cash flow. Bankruptcy filings place CrossCountry’s equity value at $1.49 billion.

Wyatt, 79, founded natural gas giant Coastal Corp. and retired as chairman in 1997. El Paso Corp. bought Coastal in 2001 for $22.6 billion. Wyatt’s displeasure with El Paso’s management fueled an unsuccessful proxy battle to oust El Paso’s board last year.