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Enron Mail |
follow up response regarding "political" risks in Project Summer. Please let
me know if you need more. mcs ---------------------- Forwarded by Mark Schroeder/LON/ECT on 05/07/2000 09:59 --------------------------- Mike Dahlke@ENRON_DEVELOPMENT 05/07/2000 07:07 To: Mark Schroeder@ECT cc: Steven J Kean@EES Subject: Re: Korean Consents - further Mark, I will look into the point you raise. It sounds like "Oldco" would be the same legal entity that now holds the JV ownership (indirectly). Enron Corp is not defined in terms of individuals. Thus, it seems there should not be a legal issue. Furhter, the Korean government, has been visited by no less than 3 very senior Enron officials within the past year. A change could make officials more reluctant to talk with Enron because the company is constantly changing people. Otherwise, it is hard for me to see why an official would want to cause trouble over a "domestic" (within Enron) matter. My guess is the challenge would come from SK Corp, who might feel "we" are trying to escape without living through the "honeymon" period and not "set off" the Right-of-refusal. There may be a desire to use various techniques, including causing political trouble, to force either Newco management or Oldco management to buy him out. Half of the "hurt" they would fall on them however, so it would seem there would be a hesitancy to use that approach. That would mean that activities of Enron, Korea might be threatened. So the risk seems like it would be dependent on what business, other than CGC joint venture, that Enron Korea might get involve in. Thus far, there isn't an active operation being run through EK. It is late (or early, actually). I will consider the point more after some sleep. Mike D. ______________________________________________________________________________ ___________________________________________________ Author: Mark Schroeder, July 4, 2000 To: Mike Dahlke Thanks. I think the one dimension that I would like to see addressed a bit more explicitly is: If the interest in the holding company itself is transferred, or the management control of the holding company changes hands, e.g., "Enron Corp." (old) is no longer chaired by Lay, who will chair "Enron Corp. (new)", but Enron Corp. (old) still is the JV interest owner, in addition to the legal requiriements, and consultation with locals you note below, is there any risk of "political" interference, such that they might extract concessions from the parties to the transaction before it could go forward. Not necessarily fair, but they might have some leverage or perceive that they do. If such a transaction goes forward, the dealmakers want to know this, so as to be able to fairly judge the risk, and how to allocate it in the deal. thanks mcs
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