UBS Warburg launches trading business acquired from Enron

Posted 8:10AM on Tuesday 12th February 2002 ( 23 years ago )

HOUSTON - UBS Warburg's new online energy trading platform may be named for the Swiss investment bank, but the staff is almost all Enron Corp. Make that ex-Enron. UBS Warburg Energy on Monday cranked up the online trading operation it acquired from the fallen energy giant and saw some action from traders buying and selling natural gas and electricity. "We're up and running and open for business," UBS Warburg spokesman David Walker said Monday of UBSWenergy.com, staffed by about 650 former Enron traders and support staff. The operation is backed by credit from UBS Warburg parent UBS AG. "We are excited to launch UBSWenergy.com and believe that the capabilities of UBS Warburg Energy, backed by the credit rating of UBS will provide a competitive and liquid energy market to our customers," said Lawrence G. Whalley, managing director and head of the new operation. Several traders in Houston and elsewhere on Monday couldn't gauge trading volume on the new site because they had yet to finalize logistics to use it, such as getting their assigned passcodes. "We haven't been able to trade," said Charlie Sanchez, energy markets manager for Gelber & Associates in Houston. "It sounds like they're putting out feelers today." "We definitely are trading. We are doing transactions," said UBS Warburg Energy spokeswoman Jennifer Walker. "Certainly there is a process of getting in your credit information and legal approvals, and certainly a ton of that is taking place today." Sanchez and traders with El Paso Corp., Tulsa, Okla.-based Williams Cos. and Entergy-Koch Trading in Houston said they had submitted needed paperwork and planned to trade on the new site when given the necessary approvals. "We'll be set up to trade with them later this week," said Chuck Carlton, a natural gas trader with Williams. U.S. Bankruptcy Judge Arthur Gonzalez, who is presiding over Enron's bankruptcy case in New York, approved UBS Warburg's offer to take over the trading business three weeks ago. The bank paid nothing but agreed to give Enron and its creditors one-third of the new venture's pretax profits. Whalley resigned as Enron's president and chief operating officer last month to lead UBS Warburg's new venture. Enron filed for bankruptcy Dec. 2. Its trading operation, once purported to reap most of the company's profits, traded energy as well as other commodities, such as paper, pulp, bandwidth and weather futures. The new operation is on the fifth and sixth floors of Enron's new 40-story glass tower across the street from the former energy giant's 50-story downtown Houston headquarters. Michael Barbis, an analyst with Fulcrum Global Partners LLC in New York, said the new organization faces a tough challenge to succeed given its association with Enron. "No one expects them to be what they were," Barbis said. "It will be a tougher time for them to get going, is my bet."

http://accesswdun.com/article/2002/2/198906