More than a decade removed from what was then the largest
corporate bankruptcy in U.S. history, Enron is not forgotten by
participants in the financial markets.
Whether or not lessons were learned from the spectacular fall is
up for debate, but what is not debatable is that Enron is gone but
not forgotten. Indirect as it may be, Enron still plays a part in
today's financial markets.
Here are a few example of Enron "alumni" that are still around
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 a 2009 initial public offering, but
the offering price was reduced when the IPO was scrapped altogether
amid a weak environment for new offerings. 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.
The post-Enron track record of some of the company's executives
is dubious at best. 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
This Kinder is the Kinder behind Kinder Morgan Energy Partners
), a stock that has returned 147 percent 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 percent,
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 (NYSE:
For those that really remember Enron and its business model, it
might seem unfathomable that a sleepy electric utility could emerge
from the opaque world of fraudulent energy trading and off-balance
sheet partnerships. It is possible, though unlikely, that many
investors remember that 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, but the shares are up 13 percent
in the past year and currently yield almost four percent. The
dividend has grown by more than 20 percent since the spin-off.
EOG Resources (NYSE:
The EOG in EOG Resources once stood for Enron Oil & Gas and
of its myriad corporate gaffes, including finding a way to go
bankrupt, spinning off EOG ranks near the top of Enron's worst
offenses. In August 1999, Enron reduced its stake in EOG to less
than 17 percent from 54 percent 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 paint
a picture of 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.
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