Enron 'alums': Where are they now?
Former employees and units of the defunct energy company experience mixed fortunes.
More than a decade after what was then the largest corporate bankruptcy in U.S. history, Enron has not been forgotten by participants in the financial markets.
Whether or not lessons were learned from the spectacular fall is debatable, but the company's legacy is still felt in today's financial markets.
Here are a few example of Enron's legacy:
U.K. investment firm Ashmore Group paid $1.8 billion for AEI in 2006 during Enron's bankruptcy proceedings. Looking for return on that investment, Ashmore sought an initial public offering in 2009, but this was scrapped amid a weak environment for new issues. AEI sold $4.8 billion worth of assets in 2011 and is now focused on power generation in emerging markets. The company is still privately held.
Enron's executives had very mixed fortunes after the company's collapse. Former CEO Jeff Skilling went to jail. Former Chairman and CEO Ken Lay passed away. Richard Kinder, who departed Enron in 1997, went on to master limited partnership greatness. He is the name behind Kinder Morgan Energy Partners (KMP), a stock that has returned 147% in the past decade.
Of course, the allure of MLPs is the dividend and Kinder Morgan has delivered on that front as well. Currently yielding 5.9%, Kinder Morgan, the second-largest U.S. MLP, typically raises its payout multiple times in a year and the dividend has nearly quadrupled since 1999.
Portland General Electric Company (POR)
For those who remember Enron and its business model, it might seem unlikely that a sleepy electric utility could emerge from the opaque world of fraudulent energy trading and off-balance sheet partnerships. However, Portland General Electric is in fact a former Enron unit.
Since being spun off from Enron in 2006, Portland General has seen its shares decline modestly, although they are up 13% in the past year and currently yield almost 4%. The dividend has grown by more than 20% since the spin-off.
EOG Resources (EOG)
EOG once stood for Enron Oil & Gas, and spinning off EOG was one of Enron's biggest mistakes. In August 1999, Enron reduced its stake in EOG to less than 17% from 54% in deals with Enron investors valued at $454 million.
Back then, Enron was seduced by the glamorous side of the energy business, one that it arguably helped create, and had no use for meat-and-potatoes hard assets such as those represented by EOG. Today, EOG is major producer of natural gas, but the firm's footprint in the Bakken and Eagle Ford shales ensure it has plenty of oil exposure as well.
EOG's oil production increased in the first half of this year and the company is viewed by many analysts and investors as one of the best-run independent oil and gas producers in the U.S. To highlight what Enron gave up with EOG, the latter had a market cap of less than $2 billion in mid-2000. At the close of markets Wednesday, EOG's market value was almost $30.7 billion.
Their downfall was that they didn't pay the construction companies that they hired to dismantle all the electric companies utilities that they inquired, but not after these same utility companies invested millions of dollars upgrading to Enviromental Inspection Requirements.
You take a little known company and all the sudden they are snatching up all these utility companies. Then they turn around and dismantle the same substations that were just upgraded. That would not make sense. Then they had the nerve not to pay the skilled laborers and Master Mechanics to take the substations down that they just went in and repaired and upgraded. Someone had to blow the whistle on where they got all the money to buy these utility companies and how they were getting by not paying the Construction companies. I know personally what construction companies that didn't get paid by the these creeps.
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