New York — The Swiss investment bank that is buying Enron Corp.'s power trading business will share a third of its profits with Enron and its creditors, a source familiar with the situation said Monday.
The plan, being presented in bankruptcy court, also calls for UBS Warburg to purchase the unit without paying any cash up front, said the source, speaking on condition of anonymity.
Terms of the deal were expected to be made public late Monday night in U.S. Bankruptcy Court. Enron spokeswoman Karen Denne said it was taking officials longer than anticipated to complete paperwork related to the deal.
Representatives of UBS Warburg did not return telephone calls Monday seeking comment.
Enron and its creditors would get 33 percent of the new business' pretax profits for at least two years, the source said. UBS Warburg, a division of Switzerland's UBS AG, would have the option of buying one-third of Enron's stake after three years and the rest in subsequent years.
Enron collapsed late last year amid revelations of partnerships used to keep billions of dollars in debt off its books and mask financial problems so that it could get cash and credit to run the trading business.
UBS Warburg won the bidding Friday for the trading operation, beating out rival suitor Citigroup Inc., a large Enron creditor. The deal must be approved by U.S. Bankruptcy Judge Arthur J. Gonzalez; a hearing is set for Friday.
Enron's energy trading business generated about 90 percent of the company's $101 billion in revenue in 2000. The deal does not include existing contracts Enron has to supply power, valued at up to $7 billion.
Trading of Enron shares, which sold for $83 a year ago but have been no higher than $1 since December, were halted Friday and Monday on the New York Stock Exchange for the sale announcement. UBS' U.S.-traded shares fell 74 cents to $49.21 Monday on the New York Stock Exchange.
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