Company Into The Water Industry - 1432 Words

She decided to venture into the water industry with the existing expertise of natural gas that Enron had already acquired. She started the Wessex Water Co. which was headquartered in Bath, England. Enron purchased Wessex in July 1998 for a price slightly under $3 billion. The venture into the water industry was a good idea as water treatment requires a good deal of energy which was one of Enron’s specialties. Moreover the water industry was a regulated utility and the possibility of a deregulation provided an opportunity to cash in on the knowledge of the profit opportunities under deregulation. Wessex was changed to Azurix after being acquired by Enron. Azurix purchased a water company through an auction, to supply water in the Buenos Aires area. But its bid was three times higher than the second highest bid which did not reflect as a wise purchase price. Further problems arose when employees of the old water company started deleting names and records of their friends and rel atives so that there was no way Azurix would know of their existence and bill them. Also people who came in to pay their bills had no clue where the Azurix offices were located. The conditions worsened when there was an algae bloom in the water system which angered the customers and they stopped paying their dues. In the spring of 1999 Azurix raised $700 million through an IPO but the money did not last long as Rebecca and Azurix were spending $100 million per month. 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