11/21 12:38
Enron Gets Extension on $690 Mln Note Due Next Week (Update1)
By Mark Johnson 
Houston, Nov. 21 (Bloomberg) -- Enron Corp., whose shares had dropped 92 percent this year amid a financial crisis, said lenders extended to mid-December the payment date on a $690 million note due next week. 
Enron, which agreed to be bought out by rival energy trader Dynegy Inc. in a transaction now valued at more than $23 billion, said earlier this week a drop in its credit rating may force it to repay the $690 million note. The repayment would strain cash reserves Enron needs to back its trading operations, investors and analysts said. 
The Houston-based company didn't say in its release who holds the note, which is owed by an affiliated partnership that owns Brazilian natural-gas assets and was backed by Enron. 
The note is held by a group of banks led by the Citibank unit of Citigroup Inc., Standard & Poor's said in a press release yesterday. 
Enron also is in discussions with other lenders on a restructuring of its debt, the company said in a statement distributed by PR Newswire. 
``We believe the interests of Chase and Enron's other primary lenders are aligned in this restructuring effort,'' James Lee, vice president of JP Morgan Chase & Co., said in the Enron statement. ``We will work with Enron and its other primary lenders to develop a plan to strengthen Enron's financial position up to and through its merger with Dynegy.'' Morgan has been advising Enron on its merger with Dynegy. 
Enron said yesterday it may have to pay $9.15 billion in debt due by 2003, suggesting the company may run out of cash before the merger closes. Dynegy has said the merger should close before the end of the third quarter of 2002. 
Enron said in a regulatory filing that it has less than $2 billion in cash or credit lines. 
Shares of Enron, the most active stock in U.S. trading, fell $1.79, or 23 percent, to $5.20 in midday trading. Before the announcement that it had renegotiated the $690 million note, its shares had fallen as much as 42.78 percent, the lowest level in more than a decade. 
Dynegy fell $2.50, or 6 percent, to $39.20. Shares of ChevronTexaco Corp., which owns 26 percent of Dynegy, rose 49 cents to $87.02