The proposed $2. 35 billion sale of Enron subsidiary Portland General Electric to Texas Pacific Group is what critics and opponents fear — a quick-turnaround plan to make...
PORTLAND — The proposed $2.35 billion sale of Enron subsidiary Portland General Electric to Texas Pacific Group is what critics and opponents fear — a quick-turnaround plan to make a huge profit on the largest remaining asset in the Enron bankruptcy, according to documents obtained by a weekly newspaper.
Willamette Week reported yesterday that it has obtained confidential documents that outline Texas Pacific plans to make big cuts in PGE staff members to reap an estimated $800 million to $1.2 billion profit on the utility by selling it within five years.
The documents were submitted to the Oregon Public Utility Commission by the Fort Worth-based investment firm, whose co-founder and managing partner, David Bonderman, has established a track record of turning around troubled companies, including Continental Airlines and Burger King.
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Lee Beyer, chairman of the utility commission, told The Associated Press the documents amount to “mere speculation” about possible outcomes of the sale, and he emphasized the commission has not made a decision — despite a recommendation from its own staff members to reject the deal.
Beyer said Texas Pacific, acting under the widely accepted rules of corporate “due diligence,” carefully analyzed Portland General Electric and came up with various “scenarios” on how to balance public benefit with increased profitability under the buyout proposal.
John Mangan, spokesman for Texas Pacific, said the investment firm has no “specific plans” for “cost cutting or staffing reductions” at PGE.
He also said the company Texas Pacific formed to handle the buyout, Oregon Electric, “has been very clear” that it plans to run PGE for up to 12 years.
Bob Jenks, director of the Citizens Utility Board of Oregon, a watchdog group, said the only thing that has been clear is that Texas Pacific wants to sell PGE again.
“The fact that their most likely outcome is selling to another company is in the public record,” Jenks said, noting the extensive filings by the Citizens Utility Board and other intervenors during commission hearings that confirm Texas Pacific has “a history of cost-cutting when they buy companies.”