Enron to sell Portland General Electric to Texas Pacific-led group

By Carlise Newman

Chicago, Nov. 18 - Enron Corp. said it will sell its Portland General Electric utility to funds managed by Texas Pacific Group for $2.35 billion.

Enron said it has signed an agreement with a new company called Oregon Electric Utility Co., which is financially backed by funds managed by Texas Pacific, a private equity investment firm.

The transaction has been approved by the Enron board of directors and is supported by the official unsecured creditors' committee in Enron's bankruptcy proceedings.

It requires the approval of the bankruptcy court, which will conduct an auction to give other potential buyers an opportunity to submit higher bids.

After the sale is approved, the parties will request approval of the Oregon Public Utility Commission and certain federal regulatory agencies.

Subject to receiving these approvals, closing is anticipated in the second half of 2004.

The final value of the sale will be determined on the basis of Portland General Electric's financial performance between Jan. 1 and closing.

"Enron and its official unsecured creditors' committee believe this transaction is the best option to deliver maximum value to our economic stakeholders," said Stephen Cooper, Enron's chief restructuring officer, in a news release. "As we have said all along, we will not break up PGE. This transaction supports that commitment."

Upon closing, Oregon Electric will include three Northwest business and community leaders, former Oregon Governor Neil Goldschmidt, Gerald Grinstein and Tom Walsh.

Grinstein is the former chairman and chief executive officer of Burlington Northern and former chairman of both Delta Air Lines and Agilent Technologies.

Walsh is an Oregon civic leader who is the former head of Tri-Met, the regional transit authority. He has served as chairman of the Oregon Board of Forestry and as vice chairman of the Oregon Transportation Commission.

Texas Pacific investors are largely institutions and private pension funds, including the Oregon Public Employees Retirement Fund, which has been an investor in TPG funds since TPG's inception.

Portland General Electric will retain its name, and its headquarters will remain in Portland, Ore.

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