Houston, May 9 (<a href=quote.bloomberg.com>Bloomberg) -- Enron Corp., the world's largest energy trader before declaring bankruptcy in 2001, plans to form a company for most of its overseas utilities, plants and pipelines after failing to get adequate bids for the assets.
The new company will be governed by an independent board, turned over to creditors and protected from liabilities related to the bankruptcy, Enron said in a statement. The assets encompass 19 companies in 12 countries and Guam, including Elektro, an electric utility in Brazil, and SK-Enron, South Korea's largest natural-gas distributor.
Enron had said in August that it would auction the assets to help repay more than $50 billion to Citigroup Inc., J.P. Morgan Chase & Co. and other creditors. After reviewing bids, Enron interim Chief Executive Stephen Cooper and other company officials decided to keep the businesses.
The market response to these assets was very, very cool,'' said Robert McCullough, an energy consultant in Portland, Oregon, who has reviewed some of Enron's assets. This new effort is just another round in a sequence of attempts to package the same troubled assets.''
Houston-based Enron in December 2001 filed what was then the largest bankruptcy in U.S. history. Since then Cooper, a bankruptcy specialist who was named chief executive in January 2002, has been working on plans to repay the creditors, either by selling parts of the company or resurrecting its businesses.
New Company to Take Most Workers
About 8,000 of Enron's 12,000 employees will become part of the new company, temporarily named ``InternationalCo,'' spokesman John Ambler said. Shares of the new company will be given to creditors. He declined to disclose the value of the assets or say how much debt would be erased after the transfer is completed.
The decision has been made that the greatest value for the estate would be to continue to operate'' the international businesses, Ambler said. We consulted extensively with the creditors, and given the current circumstances, they concurred that this was the best approach.''
The new company's formation requires approval from the bankruptcy court and the consent of the Unsecured Creditors' Committee, the statement said. Other creditors include Bank of New York, ABN Amro Bank NV and the energy-trading unit of Duke Energy Corp.
Luc Despins, a lawyer who represents the creditors' committee, did not immediately return a call seeking comment.
Overseas Assets
Enron is continuing an auction for Portland General Electric, an Oregon utility, the statement said. The company also is still trying to auction off its 47.5 interest in Eco-Electrica, which has a liquefied-natural-gas terminal, a power plant and a desalinization plant in Puerto Rico; and a 40 percent interest in Sithe/Independence Power Partners, which has a power plant in Scriba, New York.
InternationalCo would include Enron's interests in power plants in Brazil, Poland, Turkey, Guatemala and the Dominican Republic.
The assets also include a 1,866-mile (3,002-kilometer) gas- pipeline system that transports fuel to consumers in Brazil from wells in Bolivia; Transredes, the largest oil and gas-collection and distribution network in Bolivia; Vengas, a distributor of liquefied petroleum gas in Venezuela; and CentraGas, a 357-mile gas pipeline in Colombia.
Formation of InternationalCo marks Cooper's third strategy to save Enron, which once ranked seventh on Fortune Magazine's list of the largest U.S. companies, said McCullough, the Portland consultant.
Cooper in May 2002 announced a plan to form ``OpCo Energy,'' which would emerge from bankruptcy as an energy production and distribution business in North, Central and South America. The company scrapped that plan when Enron said it would auction the assets.
Pipeline Company
Enron stopped efforts to auction its three North American natural-gas pipelines in March, when the company announced a plan to form ``PipeCo,'' which would emerge from bankruptcy as a creditor-owned operator of the pipelines.
Enron's international assets may have limited value, McCullough said. Elektro, the Brazilian utility, has been hurt by economic troubles in that country and a drought that has crimped its power supplies from hydroelectric dams, he said. And there are legal disputes over the ownership of the power plants in Turkey and Poland.
They're monetizing this grab bag of damaged assets by putting them in an entity large enough that people are supposed to overlook the faults,'' McCullough said. We've not reviewed one of these assets that really felt like an opportunity, and since there are so many assets on the market right now, it's awful hard to get this far down the list.''
Enron is trying to resolve the ownership questions before the new company is formed, said Ambler, the spokesman. And the problems with the Brazilian utility may be temporary.
Between now and the time that we form InternationalCo as part of the plan for the reorganization, we'll be working to resolve the outstanding issues involved in each of the businesses,'' Ambler said. The assets themselves all continue to have good cash flow.''
Last Updated: May 9, 2003 16:07 EDT
Gabriel Garcia Marquez writes a letter to his friends...
Posted: Friday, May 09, 2003
By: Gustavo Coronel
VHeadline.com commentarist Gustavo Coronel writes: Nobel Prize winner Gabriel Garcia Marquez is not in good health. This has prompted him to write a letter to his friends which I have received via Internet, where it can be read not only by his personal friends but by his numerous admirers all over the World. For those who do not read spanish I have made a translation which, I hope, transmits something of its original beauty.
From Gabo to his friends...
"If for an instant God would forget that I am a rag doll and gave me a bit more life, I would make optimum use of that time. Possibly, I would not say all that I think, but I would definitely think before I say. I would value things not for their face value but for their significance. I would sleep little, would dream more ... since for every minute that we close our eyes we lose sixty seconds of light ... I would walk when others rest and would be awake when others sleep. If God gave me the gift of a bit of life, I would dress unpretentiously, I would lie down under the sun, not only naked of body but of soul ... I would tell men that they are wrong in believing that they should not fall in love when they grow old, but that they grow old when they stop falling in love!
I would give a child wings, but would let him learn to fly on his own. To the old, I would say that death does not derive from old age, but from being forgotten.
I have learned so much from you, men ... I have learned that everybody wants to live on top of the hill without realizing that true happiness lies in the climbing of the escarpment. I have learned that when a new-born baby first squeezes, with his little hand, his father's finger he owns him forever. I have learned that the only time a man has the right to look down on another man is when he is helping him to his feet.
I have learned so much from you but, really, all will be of little use, because when they put me in that suitcase, unfortunately I will be dying...
Always say what you feel and do what you think...
If I knew that today was the last time I would see you going to sleep, I would hold you tight and pray to God that I could be the guardian of your soul. If I knew that these were the last minutes I see you I would say to you "I love you" and would not foolishly assume that you know it.
There is always a tomorrow and life gives us another chance to do the right thing but, if I am wrong and today is all there is, I would like to tell you how much I love you, that I will never forget you. No one is guaranteed a tomorrow, young or old . Today it could be the last time that you see your loved ones. If tomorrow never comes, you will surely be sorry you did not take the time for a smile, for an embrace, for a kiss and that you were too busy to satisfy a last wish. Keep those you love near you, whisper in their ears how much you need them, love them, treat them well, take time to say "I am sorry", "forgive me", "please", "thank you" and all the loving words you know...
Nobody will remember you for your secret thoughts...
Ask the Lord for the strength and wisdom to express them ... tell your loved ones how much they mean to you..."
This is the letter from Gabriel Garcia Marquez to his friends ... in writing it, he is preparing for a journey that many other distinguished travelers have undertaken before him ... a long line of great minds and great hearts ... who have created exquisite beauty with the rather modest tools of humanity. His work has added significantly to the wonder of Man... Man, who, although condemned to death remains defiant, addressing an audience that he, she feels will be listening beyond the remotest stars.
Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983. In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort. You may contact Gustavo Coronel at email gustavo@vheadline.com
A system where individual rights, sovereignty and independence are respected
<a href=>venezuela's Electronic News
Posted: Friday, May 09, 2003
By: Kira Marquez Perez
VHeadline.com commentarist Kira Marquez Perez writes: I was reading some of the very interesting letters that have been sent to VHeadline.com and have been thinking about the advantages and disadvantages of many economic and political systems in the world and about the influence (negative and positive) they’ve had on the history of humanity.
I was a little bit worried, however, about the threatening and aggressive tone of one of these letters.
To begin I would like to say that I totally agree that both: socialism and capitalism, have failed to achieve their goals until now ... although both systems were originally based on very good ideas:
Capitalism was meant to be a system based on individual rights, sovereignty and independence.
Socialism was meant to provide full participation by each individual in all aspects of society (be it economic, political, intellectual or cultural).
Theoretically, both systems sound excellent. However, in the practice, these two terms have often been mishandled to satisfy personal interests, and that has contributed to bring pain, frustration and poverty to many countries in the world.
Extremes are always bad ... radicals in both directions have been responsible for many wars and deaths throughout history.
On both sides, the list of radicals is long: Among the right-wing dictatorships we can mention: Francisco Franco (Spain), who named himself “El caudillo” (the leader) and controlled all powers in the country, including the Falange (the only political party permitted). Franco's very good relations to Adolf Hitler's fascist and nationalist Nazi regime, as well as his support to Germany during World War II, are very well known (Hitler had also supported Franco's actions during the Spanish Civil War between 1936 and 1939).
After the war, the victorious allies would have little to do with Spain because of Franco's pro-fascist policies. However, they became more friendly to Franco during the Cold War, because he was against Communism. The right-wing dictatorship of Benito Mussolini (Italy) also had excellent relations with the Hitler and Franco regimes. Hitler's regime (although it was called Nazionalsozialismus) had obvious racist and fascist tendencies and was focused on assuring “a pure white Aryan race,” with no Jews, Blacks, handicapped or any other foreign race from which Hitler deemed imperfect or inferior to the German race.
At this point I must recall a very painful editorial from “El Nacional” (October 14, 2002) in response to a huge pro-Chavez demonstration on the day before. (El Nacional 14/10/2002: “...el mismo lumpen de siempre, convertidos en sempiternos pasajeros de autobuses, con un bollo de pan y una carterita de ron...”).
In this editorial, a supposedly “prestigious Venezuelan intellectual” from the opposition called all participants of this demonstration: Lumpen (he did it in a very contemptuous way and using a level of Spanish which I find quite questionable for an "intellectual"). He also said that they ALL belonged to the type of person that carries a piece of bread and a bottle of rum in the hand. What an editorial! These words were clearly discriminating (like in the times of Hitler) ... that says a lot about El Nacional and its owners.
At this point I would like to apologize and say that most intellectuals in Venezuela have read, learned and traveled enough not to share these racial and social prejudices.
For some, Hitler was a radical leftist. For others, he was a right-wing extremist (depending on their own political tendencies). For me he was neither ... he was a totalitarian fascist, obsessed with heroism and protagonism ... who used some aspects of both political doctrines for his own convenience ... was willing to show his power through expansion and growth of what he thought was his empire and wanted to show that he was undefeatable.
Other examples of right-wing extremists were: Anastasio Somoza (Nicaragua), famous for executing journalists or intellectuals that opposed the regime and for bombing entire neighborhoods that were on strike; Augusto Pinochet (Chile), whose regime was characterized by executions and disappearances. At the start of his dictatorship, the military Junta closed down the National Congress and Constitutional Tribunal (the same thing that right-wing dictator Pedro Carmona Estanga did in Venezuela in April 2002). Chaing Kai-Shek (China), who is well known for his efforts for maintaining China's sovereignty but who ordered in 1927 the killing of thousands of communists opposing his regime. The list is long and includes other personalities like Manuel Noriega (Panama), Ferdinand Marcos (Philippines) and many more.
However, we also want to consider the left-wing dictatorships, who have also not been any better. Undoubtedly, the regime of Joseph Stalin (Russia) is on the top of the list. Again, he was a radical with an obsession for heroism. His real name was Djugashvili, but he later changed it to Stalin which meant "man of steel." After 1934, millions of persons disappeared in Russia under Stalin's dictatorship. Mao Tse-Tung was also a dictator who ruled for 25 years in China after defeating Chaing Kai-Shek. Other left-wing dictatorships are currently happening in Cuba, North-Korea and China and I wouldn't say that these countries are profitable (China has been using a “less radical” system in the last years that has produced some good results in the economical area. Concerning human rights, however, a lot still has to be done in this country).
Now let's analyze both types of dictatorships:
Have any of these personalities (going from Hitler to Castro) really respected the individual rights, the sovereignty and the independence of their countries (principle of capitalism)? No they have not.
Have any of them allowed full participation in economic, political and cultural activities (principle of socialism)? No, they have not done that either.
So… What are these people then? Are they socialists or are they capitalists?. Or did they only use socialism and capitalism to achieve personal wealth and power?
All dictatorships are bad ... however, a very sad issue is that some dictatorships have been more strongly criticized than others, depending mostly on economical interests. Several dictatorships have even been very strongly supported by other countries, due to economic, commercial or even racial reasons.
Wouldn't it be nice to have a system where individual rights, sovereignty and independence are respected AND where, at the same time, all members of society are able to grow economically, politically, intellectually and culturally?
That is the system that we want in Venezuela.
I've been around quite a bit in England, USA, France, Japan, Germany, etc. In the USA (theoretically a mainly capitalist country) I saw several cities like New York and San Francisco with many beggars on the streets ... people who, in spite of the richness of their country and of the wealth of many other fellow Americans, had no house to sleep in and nothing to eat. There were very beautiful areas but also quite ugly areas (specially surrounding New York) with poverty and crime levels approaching those of some barrios in Caracas.
That means that the system has not really been that efficient. Moreover, when you observe the results of self-styled capitalism in Latin America, you can definitely see that something is wrong (just take a look at Argentina). I think the reason is that capitalism has been in many cases mistaken with individualism.
On the other hand, in countries like Cuba or North-Korea (theoretically mainly socialist countries) the living standards of the majority are also not good ... again, the protagonism of the leaders has played a significant role.
I must say that the social-capitalist system in Germany seems (in my eyes) to work a lot better ... living standards are very good, with an almost imperceptible difference between rich and poor. Everybody in Germany has health insurance ... the "Sozialhilfe" and the "Arbeitslosengeld" are very good means for helping those who have lost their jobs until they start working again. But ... people in Germany pay their taxes (and they're quite high), because that's the only way to keep the "social" part of the system working. There are taxes on almost everything (TV, gasoline, etc). Besides, Germany is a highly industrialized country, with a world leading automotive industry (Benz, Audi, BMW, VW, etc) and these companies also pay high taxes that are then used to cover social needs and to build a better infrastructure in the country.
A capitalist country with a reasonable social system.
If capitalism and socialism are taken literally (and not twisted by extremists) then the solution could be a combination of both...
Venezuela's CANTV to discuss January debt rollover
Fri May 9, 2003 03:13 PM ET
CARACAS, Venezuela, May 9 (<a href=reuters.com>Reuters) - Venezuela's leading telephone company CANTV TDVd.CR VNT.N said Friday it would hold talks with its main debt holders about the possibility of extending the maturity of some of its debt due in early 2004.
"We are looking into all the options we have regarding the amortization of ... $100 million of Yankee bonds that are coming due in January of 2004," CANTV's Vice President of Finances Armando Yanes told shareholders during a conference call.
But CANTV was not considering the rollover of all of the $100 million due in January, Yanes added.
The company reported a 74 percent fall in net profits for the first quarter of 2003 compared with a year ago, due to the ongoing recession in Venezuela, the world's No. 5 oil exporter.
CANTV, whose main shareholder is U.S. telephone company Verizon Communications Inc. VZ.N , last week issued guidance predicting a net loss of $73 million to $195 million for 2003, in contrast to profits of $44 million last year.
The firm blamed the projected losses on an anticipated fall in telephone use due to an expected 15 percent contraction in Venezuela's economy this year. The oil-reliant economy contracted 8.9 percent in 2002.
President Hugo Chavez's government introduced strict currency controls in late January to stem massive capital flight following a crippling oil strike by foes of Chavez in December and January. It fixed the local bolivar currency's exchange rate at 1,600 bolivars per U.S. dollar.
Companies have complained bitterly about the resulting dollar drought, and CANTV in April announced it was not immediately able to pay ordinary dividends in dollars for holders of its American Depository Receipts (ADR).
CANTV said it would continue working closely with the state exchange control board CADIVI to draw up mechanisms that would allow the company to pay the dividends in dollars and pay the Yankee bonds when they fall due.
Shares in CANTV climbed 3.23 percent in the local market Friday to 2,400 bolivars per share, while its ADRs, which each represent seven shares, climbed 1.57 percent to $10.37.