Business News short takes
Posted on Tuesday, September 19, 2006
Cooperative ex-Enron exec sentenced HOUSTON — A former high-ranking Enron Corp. trading
1 and retail energy executive was sentenced to 2 / 2 years in prison Monday for insider trading in connection with the energy company’s financial collapse. David Delainey, who pleaded guilty in October 2003, had admitted to participating in schemes to manipulate earnings to please Wall Street. Prosecutors said he sold $ 4. 25 million in stock throughout 2001 when he knew of a wide-ranging scheme to make Enron appear financially robust and inflate the company’s stock. “I’m so very sorry for my conduct,” Delainey, 40, said before he was sentenced by U. S. District Judge Kenneth Hoyt. The Canadian citizen faced up to 10 years in prison. Prosecutors had recommended he receive a sentence on the lower end of the guideline range due to his cooperation in their investigation of Enron’s collapse. He testified earlier this year in the trial of company founder Kenneth Lay and former chief executive Jeffrey Skilling. Prosecutor Kathryn Ruemmler told Hoyt that Delainey’s help in their investigation of Enron’s collapse was “critical to the case” and he was always forthcoming with information. “He has never wavered from accepting responsibility for what he did,” she said. His defense attorney, John Dowd, asked Hoyt to give his client probation, adding that Delainey had already made restitution — agreeing to pay $ 4. 25 million to the Justice Department and $ 3. 74 million to the Securities and Exchange Commission. Norway’s Statoil invests in U. S. Gulf
OSLO, Norway — Norwegian state-controlled oil company Statoil ASA on Monday announced the purchase of stakes in three oil prospects in the Gulf of Mexico from Houston-based Plains Exploration & Production Co. for $ 700 million.
State-controlled Statoil is the key producer on offshore fields that make Norway the world’s third-largest oil exporter after Saudi Arabia and Russia. The company has been expanding internationally, including in the U. S. Gulf.
“This acquisition further strengthens our deep-water position in the U. S. Gulf of Mexico,” said Peter Mellbye, Statoil executive vice president for international exploration and production.
Statoil said the deal is expected to close in early November.
Plains Exploration said proceeds from the sale will be used to buy back stock and to reduce debt. It expects to book a fourth-quarter gain for the sale.
The agreement covers stakes in two oil finds in deep-water areas of the Gulf and one in a promising offshore oil block slated for exploration. They are near fields in what is called the greater Tahiti area, where Statoil already has interests.
The first find, called Caesar, is operated by the Shell Oil Co., and Statoil has agreed to buy a 17. 5 percent interest. The second, called Big Foot, is operated Chevron Corp., and the Norwegian group has agreed to buy 12. 5 percent. Both finds could begin producing after 2010, Statoil said.
The offshore area where the companies hope to find oil is also in the Chevron-operated Big Foot area. Statoil plans to have a 12. 5 percent interest. Short-term T-bills sell at June levels
Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels since June.
The Treasury Department auctioned $ 18 billion in threemonth bills at a discount rate of 4. 815 percent, down from 4. 820 percent last week. Another $ 16 billion in six-month bills was auctioned at a discount rate of 4. 920 percent, down from 4. 935 percent last week.
The three-month rate was the lowest since these bills averaged 4. 800 percent on June 12. The six-month rate was the lowest since 4. 815 percent on June 5.
The discount rates reflect that the bills sell for less than face value. For a $ 10, 000 bill, the three-month price was $ 9, 878. 29 while a six-month bill sold for $ 9, 751. 27.
Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was unchanged last week at 5. 02 percent, the same as the previous week. Home Depot is hiring 1, 000 for aisles
ATLANTA — The Home Depot Inc., the nation’s largest home improvement store chain, says it is hiring more than 1, 000 new employees across the country as part of its latest effort to improve its stores.
The Atlanta-based company said in a hiring advisory it issued Monday that it is seeking applicants with specialty, skilled trades and professional contracting backgrounds.
The hiring is part of Home Depot’s plan to invest another $ 350 million in its stores during the second half of this year, as it tries to improve customer service amid a slowing economy.
Last month, the company said it would cut 300 jobs at its headquarters as it makes the store reinvestment program a priority.
Home Depot has about 355, 000 employees and more than 2, 000 stores in the United States, Canada and Mexico. Time Warner sells German AOL unit
FRANKFURT, Germany — Time Warner Inc. is giving up its foothold in one of the fastest-growing markets for broadband Internet access with a deal to sell AOL Germany’s Internet access business to Telecom Italia SpA for about $ 870 million.
The all-cash deal, announced late Sunday, is expected to close early in 2007, subject to regulatory approval.
The decision was expected after AOL said in August that it planned to cut 5, 000 jobs, or a quarter of its global work force, as it restructured its business to draw more advertising revenue.
AOL Germany has 1. 1 million broadband users and 1. 3 million subscribers who use dial-up or ISDN to access the Internet.
Germany’s broadband market is one of the largest in Europe, with more than 12 million subscribers by the end of June. The number of users is expected to grow by 10 million through 2009 as faster access is introduced in the country of more than 82 million residents.
The deal will make Milan-based Telecom Italia the second-biggest provider of broadband Internet in Germany with 3. 2 million customers, behind T-Online International, part of Deutsche Telekom AG. Owens Corning bankruptcy exit OK’d
PITTSBURGH — A federal bankruptcy judge approved Owens Corning’s plan for emerging from bankruptcy this fall, more than five years after the building materials maker sought protection from creditors over health claims related to its asbestos products.
Judge Judith Fitzgerald approved the plan from the bench Monday after overruling sometimes impassioned objections from alleged asbestos victims and a lawyer for one bondholder.
The plan shifts Owens Corning’s $ 7 billion in asbestos liabilities off company books and into a trust that will be established for the plaintiffs.
As part of the plan, the Toledo, Ohio-based company will pay more than $ 5 billion to asbestos claimants and as much as $ 2. 27 billion to holders of bank debt.
The plan has an effective date of Oct. 30.
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