El Paso Slide Takes Huge Toll on One of L.A.’s Richest

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El Paso Slide Takes Huge Toll on One of L.A.’s Richest

By CONOR DOUGHERTY

Staff Reporter

Back in 2000, when energy companies were hot properties, Selim Zilkha’s stake in El Paso Corp. was worth nearly $1 billion.

What a difference two years makes. On May 27, his 12.3 million shares were worth $410 million.

Heck, what a difference two weeks makes.

In the last 14 days Zilkha’s net worth has dived another $150 million, as the troubled energy trading concern continued to be buffeted on news ranging from its decision to sell assets and cut trading operations to the apparent suicide of company Treasurer Charles Dana Rice.

Early last week, shares of El Paso were trading in the low $20 range, well off from $40 per share at the beginning of May and a 52-week high of $60.

Zilkha, who also has interests in wind farms and wineries throughout California, long has been a member of the Business Journal’s list of 50 wealthiest Angelenos, last published May 27. Had the list been published last week, Zilkha, whose net worth has fallen to an estimated $400 million as a result of El Paso’s decline, would not have made the top-50.

Zilkha, thought to be El Paso’s largest individual shareholder, did not respond to requests for comment last week.

According to Thompson Financial/First Call, he has sold about $58 million in stock since March 2000. His last sale took place on April 10, when he sold 25,000 shares at $45 each, or about $1.1 million.

In 1998, the 75-year-old Bel-Air resident sold Zilkha Energy to Sonat for $1 billion; the next year Sonat was purchased by El Paso.

In a note to investors following the Rice suicide, Merrill Lynch equity analyst Carl Kirst wrote, the event has sparked wide speculation in the market.”

Kirst’s note went on to caution investors.

“While this does not change our fundamental net asset valuation analysis of $28 per share, unfortunately only the passage of time is likely to remove this event from the equation,” Kirst wrote. “We believe intermediate term investors should stay on the sidelines we believe long term investors will be anchored by the company’s solid investment grade credit standing and positive net asset value.”

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