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Enron Mail |
Randy, looks like a good solution - well done.
Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 12/19/2000 02:01 PM --------------------------- Randal Maffett 12/19/2000 10:32 AM To: David W Delainey/HOU/ECT@ECT cc: Jeff Donahue/HOU/ECT@ECT, Mark E Haedicke/HOU/ECT@ECT, Mark Koenig/Corp/Enron@ENRON, Lisa Mellencamp/HOU/ECT@ECT Subject: Ecogas/Fidelity issue Dave - I think I've worked out a solution to the Fidelity problem. Enron North America and Fidelity will agree to a back to back Put/Call option whereby after closing the sale to PNE Enron has a 6 month Call option (thru 6/30/01) to cash them out at the contract price (=$5.2MM less PV10 of accrued tax credits to date). For the period of July 1-31, 2001 Fidelity would have a Put option at the same price. This accomplishes the following: Preserves $5MM cash for Enron by allowing us 6 months to find a new buyer for the tax credits and doing a back to back flip. Preserves the integrity of the tax credits for cal 2001 (Gasco and Genco have to be unaffiliated) which will maximize our ability to recover our costs/minimize losses. Gives Fidelity a date certain when they're out of the deal AND gives them optionality to stay in if they choose. Gets the deal between Ecogas and PNE done structurally to PNE's satisfaction. I spoke w/ Donahue about internal approvals and since Enron is already exposed for the $5.2MM, and the balance can only go down (not up), we didn't feel this would need anything other than ENA Legal and Office of the Chairman. I'll assume this is correct unless I'm told otherwise.
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