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Enron Mail |
That works for me. I will attempt to answer some of Heather's questions as well.
-----Original Message----- From: Saunders, James Sent: Monday, November 05, 2001 7:14 AM To: Chandler, Bob Cc: Hayslett, Rod; 'heather.l.mueck@us.andersen.com' Subject: FW: Pro Formas Importance: High Bob - I believe we need to classify the notes w ENE on TW and NNG as long term (Other). -----Original Message----- From: heather.l.mueck@us.andersen.com [ <mailto:heather.l.mueck@us.andersen.com<] Sent: Sunday, November 04, 2001 4:52 PM To: Saunders, James Subject: Pro Formas Importance: High Jim - I'm afraid I have another "to do" for you. Given the potential for all of the overhang issues and given the significance of the receivables from the parent, we developed some pro-forma balance sheets for NNG and TW, which are attached. These assume: The note receivable from parent company continues to be classified as current (represents net of all prior cash flows between NNG/TW and parent) The only borrowings under the revolvers relate to draw downs to repay the Citibank bank debt assumed by NNG and TW We have highlighted in red the critical numbers. Given the overhang issues at Enron Corp. I have the following questions: Should the note receivable from parent be classified as current? (i.e. would Enron truly be able to pay this amount to NNG/TW if needed) How will the debt be repaid in one year if Enron Corp.'s note receivable is not available to the pipelines? Would you be able to draw down additional debt? Basically, what is the plan? Is the only debt expected to be drawn on these revolvers the assumed debt? How much more in addition, if any? Here is the basic plan, if something were to happen so that Enron was unable to pay NNG /TW back in time, then the notes with the bank would be transformed into term deals (length to be determined later). The banks are comfortable that the ability to repay the notes exists in the pipes from the existing and projected cash flows of the entities. There is no question that we should be able to borrow more against the pipes, with market multiples at 9X EBITDA and lenders willing to lend against it, there never has been a problem in that regard. The securitizations of course will prevent the same kind of deals being done, but they are really to protect the banks from an Enron credit event (preference issues). (See attached file: NNG FS pro forma.xls)(See attached file: TW FS pro forma.xls) I have to believe that the banks did this before agreeing to extend so much credit - you might want to check around and see who provided this to the banks rather than re-creating the wheel (Kevin Howard maybe). Heather *******************Internet Email Confidentiality Footer******************* Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person), you may not copy or deliver this message to anyone. In such case, you should destroy this message and kindly notify the sender by reply email. Please advise immediately if you or your employer do not consent to Internet email for messages of this kind. Opinions, conclusions and other information in this message that do not relate to the official business of my firm shall be understood as neither given nor endorsed by it.
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