Last week, the energy giant told stock exchange authorities that it had less than $US2 billion in cash and credit lines left. The weakened state of finances has led many commentators to believe Dynegy Inc will either pull out or renegotiate the $US23 billion rescue bid it announced for Enron about two weeks ago.
Enron had already received $US1.5 billion in cash from ChevronTexaco as part of the Dynegy buyout agreement. In return, Dynegy would receive preferred stock plus other rights in an Enron unit that owns the Northern Natural Gas Pipeline.
Last week, Enron won a three-week reprieve on a $US690 million note, which gave the embattled group more time to restructure its finances. Enron said talks are continuing with potential investors for an infusion of as much as one billion dollars to avoid running out of cash.
The imminent collapse of Enron will come a big blow for its chief, Mr Ken Lay, who also happens to be a big supporter of current US President, George W Bush. Enron was one of Bush's biggest corporate backers during the presidential campaign with reports the energy giant gave as much as $US1.7 billion in 'hard' and 'soft' money.
As a reward for his support, Mr Lay was given a big role in formulating Bush's controversial energy policy, which drew the ire of environmentalists and others who said the policy favoured 'Big Oil' and did nothing to reduce America's seemingly insatiable appetite for energy.
