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Scandal-rocked Enron Corp. and Swiss banking firm UBS Warburg AG announced a deal Jan. 15 in which UBS will acquire the bankrupt energy company's wholesale energy trading operations.
No cash will change hands in the deal, which was announced at 7 a.m. Jan. 15 after a series of delays. Neither company could be reached for comment.
But, according to documents posted on Enron's Web site, UBS Warburg will pay royalties equal to 33% of the trading unit's income for 10 years in lieu of a cash payment.
The Swiss company will also get the infrastructure and intellectual property of Enron's core trading operations but will have no exposure to the unit's liabilities.
UBS also has an option to stop paying royalties after the first five years by buying one-third of Enron's royalty interest in the third year of the deal for an amount based on the previous year's profit. The bank can also buy another third in the fourth year and the final third in the fifth year.
In addition, UBS will pay rent on Enron's Houston office space and is acquiring a staff of about 800 people along with the company's computer systems and hardware.
Enron's energy trading business generated about 90% of the company's $101 billion...