The US Securities & Exchange Commission is investigating an agreement by one of Dynegy's partnerships to buy gas over five years from ABG Gas Supply. Dynegy had recorded $300m in cash from the transaction, along with $80m in tax benefits.
The company will also write-off a one-time charge of $311m in respect of its Dynegy Global Communications unit.
In the post Enron world, any whiff of a problem will cause shareholders to sell. Analysts point out that Dynegy has been hit by a double whammy - investor's distrust of complex deals and financings and a meltdown in the telecommunications sector.
Dynegy is fully co-operating with federal investigators and defended the ABG transaction, confirming that it had auditor approval.
Dynegy Shares Plunge
Top US energy company Dynegy saw its shares plunge almost 30% Friday as it revealed that US securities regulators are probing one of its natural gas supply deals. The company also confirmed that it would post a first-quarter loss due to charges at its telecommunications unit.
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