BREAKFAST WITH THE FOOL
Monday, November 8, 1999
"Always remember that this whole thing was started by a mouse."
-- Walt Disney
Enron Selling Portland General to Pacific Sierra
Richard McCaffery (TMF Gibson)
Natural gas, electricity, and communications provider Enron (NYSE: ENE) has reached an agreement to sell its recently purchased Portland General Electric utility division to Sierra Pacific Resources (NYSE: SRP) for $3.1 billion in cash and debt obligations.
Portland General, which Enron bought two years ago for $3.1 billion, provides electricity for more than 714,000 customers. However, Enron has been focusing less on retail services and more on its energy wholesale services, commercial communications, and energy outsourcing businesses.
Last month, the company unveiled EnronOnline, a website where energy commodities purchasers can view real-time prices for power, natural gas, coal, liquids, pulp and paper, and many other energy commodities. Customers will be able to buy products directly from EnronOnline when the website becomes operational November 29.
As far as communications, Enron is constructing a 17,000-mile fiber optics network to serve as an Internet backbone for commercial customers. Through its communications business, Enron believes it can cash in on the corporate world's desperate need for high-quality, high-speed communications over an IP (Internet protocol) network.
Enron has developed a software platform called the Enron Intelligent Network that will be used to pipe e-commerce services to the corporate desktop.
Sierra Pacific sells electricity, natural gas, and water services to customers in Nevada and California, and has been looking to expand as the utilities industry consolidates amidst deregulation. The company was formed last summer by the merger of Nevada's two utility companies.
News to Go
Low-fare and short-haul passenger airline AirTran Holdings (Nasdaq: AAIR) will record a pretax fourth quarter charge of about $145 million to speed up the retirement of its DC-9-30 fleet of aircraft.
Internet grocer Peapod (Nasdaq: PPOD) said it has enough cash and marketable securities to fund operations into the third quarter of 2000. The company said it has a bit more than $15 million in cash and marketable securities and has retained an investment banking firm to obtain additional financing. Peapod issued a statement in response to stories that said the company didn't have enough money to fund operations next year.
Defense and electronics contractor Raytheon (NYSE: RTN.B) is undergoing a major reorganization of its largest division as part of an effort to solve widespread financial problems, The Wall Street Journal reported. This comes on the heels of an announcement Raytheon would take a $668 million charge in the fourth quarter and early next year as a result of ongoing restructuring.
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