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CNN Live At Daybreak

Enron's Future Looks Bleak, Even Nonexistent

Aired January 29, 2002 - 05:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The Enron controversy continues to bog the Bush administration.

Vice President Dick Cheney spoke one-on-one with CNN White House Correspondent John King last night. He denied again that anything improper occurred between the White House and Enron.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Nobody's got a charge to make. Nobody did anything wrong. Enron didn't receive any special treatment. They were treated and dealt with just like a lot of other energy companies were that we talked to during this process. But the suggestion that somewhere something improper occurred here simply isn't valid.

(END VIDEO CLIP)

COSTELLO: A lot of people also want to know just what's left of Enron and what's in the future for the former energy giant.

Fred Katayama of CNN Financial News has some answers for you.

(BEGIN VIDEOTAPE)

REV. JESSE JACKSON: We're going to have a prayer vigil and rally.

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): The Reverend Jesse Jackson came to Enron to pray for its laid off employees, but the company could use a prayer if it's to survive. Gone is Enron's profit gushing crown jewel, its trading operation, sold to UBS. Gone, too, is its prized northern natural gas pipeline, sold to Dynegy. And its utility, Portland General, will be sold to Northwest Natural Gas.

What's essentially left of what was once the seventh largest U.S. industrial company is very little, a few smaller pipelines worth about $1 billion, $1 billion in natural gas and power contracts, and utilities in Brazil, Argentina, and India and other international assets worth roughly $6.5 billion. Those estimates by the investment bank Simmons add up to less than $9 billion, one fifth of what Enron claimed they were worth in early December.

RAY NIMMER, UNIVERSITY OF HOUSTON LAW SCHOOL: The key issue is whether they can find enough left in the assets so that they can, by stripping away some assets, changing some others, come out with a sort of basic core of a company that is profitable, at least in terms of a positive cash flow, and whether that kind of core would be sustainable as a separate company.

KATAYAMA: If the core business doesn't produce enough cash flow, liquidation could be the most likely outcome.

JEFF DIETERT, ENERGY ANALYST, SIMMONS & COMPANY: There is a case where the creditors would look at pure liquidation. Cutting their losses and getting this issue behind them would benefit the creditors and there are liquid markets for most of the asset that's in -- Enron's got, and they could be divested fairly quickly and easily.

KATAYAMA: But with some Latin American economies facing a crisis, some analysts feel Enron may be better off restructuring the company first and waiting for higher priced offers for its assets.

(on camera): But a few creditors are calling on the bankruptcy judge to appoint a trustee. If that were to happen, experts say, it's most likely the assets would be sold off and the lights would go out on Enron.

Fred Katayama, CNN Financial News, Houston, Texas.

(END VIDEOTAPE)

COSTELLO: Okay, so now you know.

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