USA • M & A UK company Centrica has abandoned its $130 million takeover of NewPower, the loss-making US gas and electricity supplier, after a New York judge ruled that the UK company could not be shielded from Enron-related liabilities. In December, Centrica purchased Enron Direct, a UK electricity and gas supplier, for $138.6 million. Judge Gonzalez, who is presiding over the Enron bankruptcy case, denied a motion from Enron to indemnify Centrica against future pension and tax liabilities arising from Enron's links to NewPower, in which it holds a 44 per cent stake.
The ruling leaves NewPower going deeper into crisis. Its shares, which had already fallen to a tenth of their value last summer, fell 45 cents to 37 cents. The company said it was looking at other options including stock deals and asset sales. NewPower supplies power to about 650 000 mainly residential customers in deregulated US markets. On announcement of the deal Centrica said that although more than half NewPower's shares were committed to the takeover, the sale of the Enron stake was subject to bankruptcy court approval.
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