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Buyer of division will share profits with Enron, creditors
NEW YORK -- The Swiss investment bank that is buying Enron Corp.'s power trading business will share a third of its profits with Enron and its creditors, a source familiar with the situation said Monday.
The plan, being presented in bankruptcy court, also calls for UBS Warburg to purchase the unit without paying any cash up front, said the source, who spoke on condition of anonymity.
The terms were expected to be made public Monday afternoon in U.S. Bankruptcy Court.
Representatives of UBS Warburg and Enron didn't immediately return telephone calls seeking comment Monday.
Enron and its creditors will get 33 percent of the new business' pretax profits for at least two years, the source said. UBS Warburg, a division of Switzerland's UBS AG, will have the option of buying one-third of Enron's stake after three years, and to buy the rest of its stake in subsequent years.
Enron collapsed late last year amid revelations of complex partnerships used to keep billions of dollars in debt off its books and mask financial problems so it could continue to get cash and credit to run the trading business.