Victim of Enron fallout, Nepco reportedly close to signing buyout deal

Nepco is close to getting a new lease on life after months of turmoil caused by the bankruptcy of its parent, Enron.

The Bothell power-plant construction company is in advanced talks with Canada's SNC-Lavalin regarding a buyout that would involve Nepco's former managers, according to people familiar with the talks.

A deal for Nepco, which has sales of about $1.5 billion a year, could be announced as early as next week, they say.

A buyout could rescue Nepco from the limbo into which it was thrust when Enron filed for bankruptcy in December, freezing funds Nepco needed to pay bills and costing it at least one multimillion-dollar power-plant contract.

Enron downfall direct hit

Nepco is the first local company to be hit directly by Enron's spectacular downfall. In April the company laid off 40 of its 600 Bothell employees.

It wasn't immediately clear how the acquisition would be structured, but it could involve Nepco filing for bankruptcy protection just before the acquisition to clear any claims to the assets, according to those familiar with the transaction.

Officials at Nepco, Enron and SNC-Lavalin declined to comment.

Nepco's customers, however, said they were aware of the deal and supported it. Nepco probably would remain as engineering, procurement and construction contractor on 15 power plants. . However, the buyout might require contract changes.

"SNC-Lavalin is a very large Canadian organization experienced in this field," said Dave Szymanski, spokesman for TECO Energy, a Tampa-based utility. "From that perspective (the buyout) appears to be a positive for us. Obviously, in a buyout situation we have contracts with Nepco, so there would have to be contract modifications."

Output for 4 million homes

TECO and Panda Energy of Dallas have jointly hired Nepco to build 2,200-megawatt gas-fired power plants in Arkansas and Arizona, worth about $1 billion each, whose combined output will supply 4 million homes.

"We've been kept in the loop on the buyout," said Harold Green, a spokesman for Panda Energy. "We're confident that (SNC-Lavalin) can move it forward."

Officials from SNC-Lavalin, a Montreal-based supplier of infrastructure systems, have visited Nepco job sites in recent weeks and are receiving information from Nepco's purchasing and accounting departments, according to one person familiar with the details.

It wasn't clear whether Nepco's former managers would resume their roles, or what management role SNC-Lavalin would take.

Nepco President John Gillis and four other top executives stepped aside in February to avoid a conflict of interest as they worked on a management buyout.

Nepco was founded in 1938 to help boilermakers sell equipment.

Alwyn Scott can be reached at 206-464-3329 or ascott@seattletimes.com