$44bn lifeline for Enron, US averts power crisis

Enron Corp, one of the world's largest energy trading groups, has staved off financial collapse after receiving a $US23 billion ($44.

8 billion) rescue bid from Dynegy, thus averting a potential crisis in the US power and natural gas markets.

ChevronTexaco Corp, a 26 per cent shareholder in Dynegy, has agreed to provide Enron with an upfront cash injection of $US1.5 billion. Dynegy said it would assume about $US15 billion in Enron debt.

The deal, however, is likely to incur the wrath of consumers in California after Enron and Dynegy were blamed for soaring electricity prices that left the State's biggest utility bankrupt and the second largest looking for a government bail out.

Enron shares have plunged 90 per cent this year following investigations by US regulatory authorities into accounting irregularities which limited its ability to finance operations.

Dynegy will have an annual revenue of more than $US200 billion, more than 22,000 MW of electric generating capacity and 40,000 km of pipeline after the merger.