AEP says loss to Enron minimal
Saturday, December 1st 2001, 12:00 am
By: News On 6
COLUMBUS, Ohio (AP) _ American Electric Power said it could lose up to $50 million from business deals with Enron Corp. because of the collapse of the energy-trading giant, a company spokesman said.
But that's a minimal amount to a company that reported revenues of $47 billion and earnings of $973 million for the first nine months of 2001, spokesman Pat Hemlepp said.
Columbus-based AEP traded with Houston-based Enron on a daily basis, but Hemlepp said the company took measures to limit its exposure to Enron over the past few weeks.
And the company, ranked second behind Enron in the wholesale power and wholesale natural gas markets, could gain a larger share of the market if Enron declares bankruptcy, Hemlepp said.
Enron Corp.'s shares trickled down Friday another 10 cents, or 28 percent, to 26 cents in heavy trading on the New York Stock Exchange. Last December, shares were trading near $85 per share.
The company has refrained from public comment, even as the market prepared for what could be the largest corporate bankruptcy filing in history.
Enron's loss of credibility in the market started with revelations that its chief financial officer was running partnerships that allowed the company to keep half a billion dollars in debt off its books. In early November, Enron restated its earnings back to 1997, eliminating more than $580 million in reported income in that time span.
Houston-based Dynegy Inc. swooped in to rescue Enron with an $8.4 billion buyout, but even top officials at the smaller rival were surprised when Enron later disclosed it had a $690 million debt.
Congressional leaders are calling for hearings into the Enron fallout, the Securities and Exchange Commission is investigating, and both investors and employees have filed several lawsuits.