PLEASE SEE ATTACHED AP RELEASE FROM YESTERDAY WITH QUOTE FROM DYNEGY.
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By JUAN A. LOZANO
Associated Press Writer
11/21/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.
HOUSTON (AP) - Concerns about Enron Corp.'s ability to weather its spiraling financial problems sent the company's stock down nearly 23 percent to its lowest level in nearly 10 years. 
The shares on Tuesday tumbled dlrs 2.07 to dlrs 6.99 on the New York Stock Exchange - the lowest since the shares closed at dlrs 7.72 in Feb. 6, 1992 - a day after the company disclosed that it might have to pay a dlrs 690 million debt by next week and amid reports that energy companies weren't selling it power and natural gas for fear they won't be paid.
Analysts were mixed on whether Enron can survive its latest financial storm and if the dlrs 10.5 billion merger between Enron and its rival Dynegy Inc. - expected to conclude by next summer - will fall apart. 
Andre Meade, head of the U.S. Utility Research for Commerzbank Securities, said he doesn't know if Dynegy is willing to take on Enron's headaches if the value of its core business - energy trading - is reduced or collapses. 
"The bid by Dynegy gave (Enron) breathing space but it did not solve all their problems," Meade said. 
But Duane Grubert, an analyst with Sanford C. Bernstein and Co., said, "Dynegy will do what it needs to make sure the deal will prevail, which still looks attractive to them." 
Officials with Enron and Dynegy, both Houston-based, said reports of problems with energy trading were incorrect and the merger was not in trouble. 
John Sousa, Dynegy spokesman, said Dynegy will stick with its dlrs 8.7 billion buyout plan. 
"We continue to do business with Enron. We are one of their largest customers and they are one of our largest customers," Sousa said. 
Late Monday, Enron filed restated third-quarter earnings with the Securities and Exchange Commission that increased its loss for the period by 3 cents a share to 87 cents. 
The company also disclosed it is trying to restructure a dlrs 690 million obligation that could come due Nov. 27. 
Adding to Enron's financial woes are reports by Dow Jones News Service that for several weeks, companies have limited buying and selling future deliveries of power and natural gas for fear they won't be paid. That could leave Enron unable to do business. 
"It's obvious that they remain in a pretty precarious position and things have evolved in a declining and worsening path," said Charlie Sanchez, energy markets manager for Gelber & Associates, a Houston-based energy trading firm. "I think that there is little in terms of what could renew confidence in any trading." 
Enron spokesman Karen Denne said reports that Enron was having trouble buying from energy traders were "erroneous." 
"We've seen no recognizable change in the number of customers," she said. "Our transaction volume is within the normal range." 
Denne said the company has received verbal indications it will be given more time to pay off the dlrs 690 million debt that could be due next week. 
Standard & Poor's Corp. on Tuesday said it continued to monitor Enron's credit rating for possible downgrade, which would put Enron's debt in "junk" status territory, making it harder and more expensive to borrow money. 
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On the Net: 
http://www.enron.com 
http://www.dynegy.com