Exhibit 99.1
Karen Denne
(713) 853-9757
ENRON ANNOUNCES SALE OF CROSSCOUNTRY ENERGY
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TO NUCOASTAL LLC FOR $2.2 BILLION
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FOR IMMEDIATE RELEASE: Friday, May 21, 2004
HOUSTON - Enron announced today that it has reached an agreement with
NuCoastal LLC, whose owners are affiliates of Kelso & Company, ArcLight Capital
Partners LLC, Citigroup, and Oscar S. Wyatt, Jr., for the sale of CrossCountry
Energy, Enron's North American natural gas pipeline business.
The transaction, which has been approved by the Enron Board of
Directors and is supported by the Official Unsecured Creditors' Committee,
requires the approval of the Bankruptcy Court, which will oversee an "overbid"
process to give other potential buyers an opportunity to submit superior bids.
Enron is expected to file the sale agreement with the Bankruptcy Court early
next week.
The transaction purchase price of approximately $2.2 billion includes
the assumption of outstanding Transwestern debt, which is approximately $430
million.
"This sale agreement provides the best value for our creditors and
reflects a stronger market for quality, high-performing energy assets than we
had seen two years ago," said Stephen F. Cooper, acting CEO and chief
restructuring officer of Enron.
After considering the sale of the pipeline assets following Enron's
bankruptcy, Enron instead formed CrossCountry Energy in June 2003 as a holding
company for Enron's interests in Transwestern Pipeline Company, Citrus Corp.,
and Northern Plains Natural Gas Company. These three businesses have
approximately 8.5 Bcf/d of capacity and 9,900 miles of pipeline.
Once the Bankruptcy Court approves the sale, the transaction is
subject to certain regulatory and governmental approvals and is expected to
close by the fourth quarter of 2004.
CrossCountry Energy is headquartered in Houston and has approximately
1,100 employees. Transwestern Pipeline Company is a wholly owned 2,600-mile
pipeline system extending from West Texas to the California border. Citrus
Corp., which is held 50 percent by Enron and 50 percent by Southern Natural Gas,
an El Paso affiliate, owns the 5,000-mile Florida Gas Transmission system that
runs from south Texas to south Florida. The wholly owned Northern Plains Natural
Gas Company is one of the general partners of Northern Border Partners, L.P.
(NYSE: NBP), which owns interests in Northern Border Pipeline Company,
Midwestern Gas Transmission Company, Viking Gas Transmission Company and
Guardian Pipeline, LLC. CrossCountry Energy's Internet address is
www.crosscountryenergy.com
Enron's Internet address is www.enron.com.
This press release may contain statements that are forward-looking within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Investors are cautioned that any such
forward-looking statements are based on management's current expectation and, as
such, are not guarantees of future performance. Accordingly, actual results
could differ materially as a result of known and unknown risks and
uncertainties, including, but not limited to: various regulatory issues; the
outcome of the Company's Chapter 11 process; risks inherent in the Company's
Chapter 11 process, such as the non-confirmation of the Joint Chapter 11 Plan
(the "Plan") of the Company and its debtor affiliates (collectively, the
"Debtors"), non-occurrence or delayed occurrence of the Plan's effective date or
delayed distribution or non-distribution of securities or other assets under the
Plan; the uncertain outcomes of ongoing litigation and governmental
investigations involving the Company's operating subsidiaries and the Debtors,
including those involving foreign regulators and the U.S. Congress, the
Department of Justice, the Securities and Exchange Commission ("SEC"), the
Department of Labor, the Internal Revenue Service, the Pension Benefit Guaranty
Corporation, the National Association of Securities Dealers, Inc., the Federal
Energy Regulatory Commission, the Commodity Futures Trading Commission, the
Federal Trade Commission, the California and Connecticut Attorneys General and
numerous Congressional committees and state agencies; the uncertain outcomes of
numerous lawsuits and claims; the effects of negative publicity on the Company's
operating subsidiaries' business opportunities; the effects of the departure of
past and present employees of the Debtors; uncertain resolution of special
purpose entity issues; the preliminary and uncertain nature of valuations and
estimates contained in the Plan; financial and operating restrictions that may
be imposed on an operating subsidiary of the Company if the Company is required
to register under the Public Utility Holding Company Act; potential
environmental liabilities; increasing competition and operational hazards faced
by the Debtors and operating subsidiaries of the Company; the potential lack of
a trading market for the securities distributed to creditors; uncertainties
created by the lack of reported information for securities distributed to
creditors and the lack of independent operating history of the Company's
operating subsidiaries; economic, political, regulatory and legal risks
affecting the finances and operations of the Debtors and the Company's operating
subsidiaries; and the uncertain timing, costs and recovery values involved in
the Debtors' efforts to recover accounts receivable and to liquidate the
remaining assets.
As explained in a November 8, 2001 Form 8-K filed by the Company with the SEC,
the previously issued financial statements of the Company for the fiscal years
ended December 31, 1997 through 2000 and for the first and second quarters of
2001 and the audit reports covering the year-end financial statements for 1997
through 2000 should not be relied upon. In addition, as explained in an April
22, 2002 Form 8-K filed by the Company, the financial statements of the Company
for the third quarter of 2001 should not be relied upon. The Company continues
to believe that the existing common and preferred stock of the Company have no
value. However, the Joint Chapter 11 Plan of the Company and its debtor
affiliates filed with the Bankruptcy Court on July 11, 2003 provides the
Company's stockholders with a contingent right to receive recovery in the very
unlikely event that the aggregate value of the Company's assets exceeds the
total amount of allowed claims.
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