Chinese Company Buys out Enron Joint Venture Shares

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Last updated at: (Beijing Time) Wednesday, December 04, 2002

Chinese Company Buys out Enron Joint Venture Shares

A Chinese subsidiary of failed US-based energy giant Enron has agreed to sell its 51 percent stake in a joint venture firm to a Beijing-based multinational administrative corporation.

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A Chinese subsidiary of failed US-based energy giant Enron has agreed to sell its 51 percent stake in a joint venture firm to a Beijing-based multinational administrative corporation.

Enron International Chengdu Power Ltd. (Enron-Chengdu) will transfer its holdings in Sichuan Jialing Electric Power Ltd., Enron's joint venture with Sichuan Electric Power Corp., to Lin Feng Group which has energy, investment and capital operations.

The joint venture has a registered capital of 920 million yuan (111 million US dollars) and a total investment of three billion yuan (361 million US dollars).

Steve Jenigan, director of Enron-Chengdu, who is also president of Jialing corporation, expressed his "mixed" feelings about the deal at the signing ceremony in Chengdu, capital of west China's Sichuan province.

He said the company hope to return some day since it had cooperated well with Sichuan and provided "reliable" electricity to the province over the past three years.

"Enron did make an appreciable contribution to Sichuan's power industry," said provincial Vice-Governor Wang Hengfeng.

"The transition from foreign to domestic capital shows that stock transfer is well protected in China," Wang said.

Lin Feng has three regional groups in Chengdu, Beijing and the United States with its total assets reaching proximately 6.8 billion yuan (819 million US dollars).

A high-tech company and a Hong Kong-based company under Lin Feng will hold 26 percent and 25 percent respectively of Enron's stock in the deal.

Enron filed for bankruptcy on December 2 last year amid scandal over its questionable accounting practices.

Before its collapse, Enron was the world's largest energy merchant, accounted for roughly 25 percent of the market it helped to pioneer.

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