COLUMBUS, Ohio – American Electric Power Co.'s latest acquisition is one of several likely in the next few weeks as a result of the collapse of Houston-based Enron Corp.
Columbus-based AEP, the nation's largest generator of electricity, this week bought the bankrupt company's foreign coal contracts and hired 22 people from Enron's international coal trading operation. The company would not disclose the cost.
The deal increases staffing at AEP's international energy-trading operation in London to 25, said company spokesman Pat Hemlepp.
"This is a situation where there is elation over someone's misfortune," said Joan Goodman, an analyst with Donaldson, Lufkin & Jenrette.
Goodman said Enron's competitors and trading partners, such as AEP, will benefit from the likely sale of portions of the company.
Enron's once-lucrative trading business could be sold to a competitor or a large suitor such as Citigroup Inc., Goodman said.
Citigroup and investment firm UBS AG reportedly are preparing bids to purchase the trading operations of Enron, which filed for bankruptcy protection this month.
Hemlepp said AEP probably would not be interested in either Enron's trading business or its online business because AEP has a healthy energy-trading business of its own.
AEP ranks second among North American wholesale traders of electricity and natural gas in terms of volume traded. It trails Enron in both categories.
With the Enron bankruptcy, AEP is positioned to become the leader in both areas.
"No. 1 would be nice but our goal is to be profitable," Hemlepp said. "Anybody can do volume."
Michael Worms, an analyst with Gerard Klauer Mattison, said AEP and other rivals probably will capture market share from Enron and hire some of its people.
Hemlepp said AEP and many other energy corporations have a "huge stack of resumes from former Enron employees."
AEP has said energy-trading markets have remained stable and relatively unaffected by Enron's fall.
AEP has said it could lose as much as $50 million as a result of the Enron bankruptcy. The companies were trading partners and the loss would be tied to uncollectable debts from transactions.