Following on from our brief discussion during your last visit to London, I
just wanted to give you a heads-up on where we are with the Du Pont/ETOL
steam/power deal given the discussions you and Harold had with them earlier
in the year. Based on prior experience in getting to closure with Du Pont,
there is a chance that someone senior from Du Pont will put in a call to you
or maybe Lou/Tom to express disappointment on progress and encourage Enron
concessions, resulting in premature deal closure for us.
ETOL has tabled a blend-and-extend deal to Du Pont, in which they have shown
interest to get to closure. However, they just want to transact on the major
value items for themselves now and then deal with other Enron value items
next year in good faith. We have indicated that we will commit Enron
resource to get the whole deal done as soon as possible, specifying a Jan 01
start, and will not allow cherry picking.
Whilst the overall impact to ETOL is PV neutral, the deal does substantially
reduce long term volume risk on what is already a deep in the money deal for
us. The motivation for DuPont is that the deal results in immediate annual
savings, around $3m in 2001, which fits with their corporate goal to deliver
If you are called by Du Pont and need more info let me know. We want the
whole package from them.