http://www.arabia.com/business/article/english/0,1690,99768,00.html

British banks face heavy losses over Enron collapse

Two of Britain's three biggest banks, were believed to have a combined exposure of almost one billion pounds to Enron December 03, 2001, 10:45 AM LONDON (AFP) - British banks face losses running into more than one billion dollars from the seemingly unstoppable slide into bankruptcy of the US energy trader Enron, British newspapers reported Sunday. The Sunday Telegraph said two of Britain's three biggest banks, Royal Bank of Scotland and Barclays, were believed to have a combined exposure of almost one billion pounds (1.45 billion dollars) to Enron.

Meanwhile, Enron's British subsidiaries owe more than 600 million pounds to banks in Britain, the Sunday Times added.

As well as Royal Bank of Scotland (a gross exposure of 600 million pounds) and Barclays (300 million pounds), other British institutions are also facing heavy losses.

The Sunday Times estimated the total for all creditor banks could be up to 8.4 billion pounds (12.2 billion dollars).

Enron, which earlier this year was ranked seven on the Fortune 500 list of US firms, is expected to file for Chapter 11 bankruptcy protection.

The meltdown came this week as a life-saving merger plan disintegrated and its credit rating was slashed, requiring billions of dollars to be repaid with little hope of getting new loans.

If Enron files for Chapter 11, having already demanded creditor protection in Europe, it would be the biggest US bankruptcy in history.

The money owed to British banks by Enron's subsidiaries in this country is linked to project finance deals on a gas-fired power station half-owned by the company in northeast England.

Abbey National, another British bank, said Friday it was planning to write off 95 million pounds of a 115-million-pound loan it had advanced to Enron.

-- Anonymous, December 03, 2001