Enron Spinning Off Oil Subsidiary
HOUSTON (AP) _ Enron Corp. announced plans Thursday to spin off its oil trading and transportation subsidiary, allowing the parent firm to concentrate on natural gas.
Enron’s common shareholders will receive an undetermined number of shares in the new firm, Enron Oil Trading & Transportation Co., which probably will be based in Houston, Enron spokeswoman Diane Bazelides said.
The transaction is planned for the first quarter of next year.
J. Michael Muckleroy, chairman and chief executive officer of Enron Liquid Fuels, will be named chairman and chief executive officer of the new company. The old subsidiary has fewer than 1,000 employees. Officials said they weren’t sure how many workers the new company would employ.
Enron Chairman Kenneth L. Lay said the move would reduce Enron’s $13.5 billion annual revenues by half or more. But he said Enron should still be able to meet its goal of 15 percent earnings-per-share growth in 1993.
Lay said the crude oil business does not fit the company’s goal of becoming a leader in natural gas.