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Enron Mail |
Just a quick update on the proposed structure from the tax perspective.
London tax has been in discussion with our colleagues in Houston with respect to this proposal and a similar transaction proposed with respect to non-metals business (Brent Hendry - ENA Legal). For the Metals transactions in point, the former MG London Inc would act as agent for ENA in arranging the transaction with the US counterparty. ENA would then back the transaction (through RMT) to Enron Metals Limited. MG London Inc would earn a commission for arranging the transaction, and the cost of this commission (invoiced to ENA) together with compensation for the credit risk assumed would need to be recovered by ENA in the form of a spread. The net result is that the income attributable to the functions performed and risks assumed is taxed in the US, with the remaining economics of the metals positions being assumed by Enron Metals Limited. We are still in discussion with ENA Tax, and hope to conclude on the above soonest. REgards Janine Jeffrey T Hodge 20/10/2000 18:08 To: Justin Boyd/LON/ECT@ECT cc: Alan Aronowitz/HOU/ECT@ECT, Janine Juggins/LON/ECT@ECT, Mark Taylor/HOU/ECT@ECT Subject: Re: Enron Metals Justin: I agree with the comments of both Alan and Mark regarding this issue. In particular, it would seem to be important to act on Mark's comments regarding the impact of the FCM status of Enron Trade Services, Inc. Jeff Justin Boyd 10/16/2000 05:22 AM To: Alan Aronowitz/HOU/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT cc: Janine Juggins/LON/ECT@ECT Subject: Enron Metals Gentlemen, I met with Craig Young (MG US) last week, who is keen to progress metals business with large US corporates (e.g. Anheuser Busch), on the following basis: o Assume ENA and US Corporate are existing parties to ISDA/Credit Support Documents (the "Master"). o ENA and US Corporate would agree to expand range of OTC products to include OTC metal derivatives under the Master. The principals to the metals trades would therefore be the US Corporate and ENA. These trades would however be "arranged" by MG London Inc. (an FCM) as "arranger" in the US for ENA. o Enron Metals Limited (EML) from London would agree to provide metals prices to ENA and/or MG London Inc. in the US, and in return receive a commission from MG London Inc. o ENA would back-to-back OTC metals derivatives with EML via an intra-group ISDA Master. Look forward to your views. Thanks. Justin
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