Enron Mail

From:mark.taylor@enron.com
To:sara.shackleton@enron.com, shari.stack@enron.com, carol.clair@enron.com
Subject:Re: Margaux/Whitewing
Cc:
Bcc:
Date:Thu, 24 Feb 2000 06:50:00 -0800 (PST)

Do any of you guys know about this deal?
---------------------- Forwarded by Mark Taylor/HOU/ECT on 02/24/2000 02:49
PM ---------------------------


Scott Sefton
02/24/2000 11:32 AM
To: Mark Evans/LON/ECT@ECT
cc: Stuart Schardin/LON/ECT@ECT, Mark - ECT Legal Taylor/HOU/ECT@ECT, Nora
Dobin/Corp/Enron@ENRON
Subject: Re: Margaux/Whitewing

Mark,

I finally got to speak with Mike yesterday. The short answer is that Nora
Dobin in Global Finance legal will be your contact person on everything other
than the swap. Mark Taylor (or his designee) will handle the swap.

We will rely heavily on Ron Astin and Trena Chandler of V&E to assist us on
the Whitewing issues. In case you didn't know, Ron and Trena represented us
in the creation of Whitewing (and its holding company Condor) and have been
involved in all the subsequent Condor/Whitewing transactions. Because Jeff
Eldredge has a significant role in Margaux, I hope having V&E involved here
and in London will facilitate coordination on these issues.

Cheers
Scott



Mark Evans
02/24/2000 08:55 AM
To: Scott Sefton/HOU/ECT@ECT
cc: Stuart Schardin/LON/ECT@ECT
Subject: Margaux/Whitewing


Scott,

in Cynthia's absence, can you allocate someone else from your group to
oversee this? As you can see, we are in need of some immediate assistance on
Whitewing.

Did you get the chance to speak to Mike Jakubik about Margaux? Can you help
out with Houston coordination or shall I just get on with it with Mark Taylor
and Jeff Hodge?

Thanks.


Mark



---------------------- Forwarded by Mark Evans/LON/ECT on 24/02/2000 14:47
---------------------------


Stuart Schardin
24/02/2000 11:52
To: rastin@velaw.com, tchandler@velaw.com, Ben F Glisan/HOU/ECT
cc: Donette Dewar/HOU/ECT@ECT, Anne Edgley/LON/ECT@ECT, Mark
Evans/LON/ECT@ECT, Maroun J Abboudy/LON/ECT@ECT

Subject: Margaux/Whitewing


Ron/Trina/Ben,

I wanted to touch base with you on some Margaux-related issues for Whitewing
and determine what the appropriate course of action is.

As a brief description of the Margaux transaction, in case you have not been
updated recently, the Margaux transaction will now occur through the
synthetic transfer of risk to the Noteholders/Margaux equity. The method by
which this occurs is as follows. Whitewing continues to hold the equity
interests in the assets (excluding 56% of Trakya, ETOL, approx. 31.25% of
Sutton Bridge, 50% of Nowa Sarzyna, and approx. 50% of Teesside, all of which
are held by Enron). Whitewing enters into a fixed for floating swap with
ENA, with Whitewing making a fixed annual payment to ENA in an amount
representing the base case cash flows of the underlying assets and ENA making
a floating payment to Whitewing that is initially equal to the fixed payment
from Whitewing but is adjusted downward if certain identified negative things
happen at the various projects (thereby transferring certain of the risks of
the projects through the floating leg). Concurrently, Margaux (the Issuer)
raises approx. $511 mm of capital and, through a whollly-owned subsidiary,
purchases the floating leg (receiveable) from Whitewing for $511 MM. In
other words, Whitewing enters into the swap and immediately monetizes its
receiveable to Margaux. The net result is that Whitewing receives cash
proceeds up front, and has a fixed payment obligation to ENA, and ENA has a
floating payment obligation to Margaux. I've attached a structure diagram
below.

With this in mind, the following issues related to Whitewing have arisen.
The tax group would like to characterize the payment ENA receives from
Whitewing as a preferred partnership distribution (see attached note from
Donette Dewar below). My question is how do we achieve this result. First,
is Whitewing LP able to enter into this transaction itself, or does it need
to occur at a subsidiary level? In other words, does the swap fall under the
definition of "Indebtedness" (clause (viii) perhaps?) in the Whitewing LP
Agreement, which is prohibited at the Whitewing level? If it cannot, is SE
Acquisition the best candidate to be ENA's counterparty, or do we run into
issues with the Natwest facility (although they'd likely consent since they
will get repaid out of the proceeds of the transaction)? Once the issue of
who is the appropriate counterparty has been determined, we need to discuss
the mechanics by which we effect the transaction. If we are indeed going to
open up the Whitewing LP Agreement, I suspect that AnnMarie will need to
revisit the Allocation and Distribution sections, which is probably no easy
task. If not, and the transaction will occur at a subsidiary level, we need
to determine where. Also, I'm sure this transaction will require
Certificateholder approval as it is in excess of the $40mm threshold. A
final logistical issue that Donette raises in her note is who will be
responsible for the legal work required at the Whitewing level.

More generally, are there any other legal or other issues that you see with
respect to this transaction from a Whitewing perspective?

If you'd like to discuss the transaction further, please let me know. I'll
be in Houston the early part of next week, so perhaps we can spend some time
discussing these issues then. Thanks, and I look forward to seeing you next
week.

Best regards,

Stuart


---------------------- Forwarded by Stuart Schardin/LON/ECT on 24/02/2000
11:09 ---------------------------


Anne Edgley
24/02/2000 09:48
To: Stuart Schardin/LON/ECT@ECT
cc:

Subject: Re: Margaux - Whitewing Partnership amendment


---------------------- Forwarded by Anne Edgley/LON/ECT on 24/02/2000 09:49
---------------------------
From: Cynthia Harkness on 23/02/2000 12:28 CST
To: Mark Evans/LON/ECT@ECT
cc: Donette Dewar/HOU/ECT@ECT, Anne Edgley/LON/ECT@ECT, Maroun J
Abboudy/LON/ECT@ECT, Stephen Dwyer/LON/ECT@ECT, AnnMarie
Tiller/Corp/Enron@ENRON, James Ginty/Corp/Enron@ENRON, Ben F
Glisan/HOU/ECT@ECT, Scott Sefton/HOU/ECT@ECT

Subject: Re: Margaux - Whitewing Partnership amendment

Dear All,

I will be leaving Enron Global Finance this Friday to join Enron Broadband
Services, Inc. You should refer any inquiries in this regard to Scott
Sefton. It was a pleasure working with you and I wish you great success in
finalyzing Margaux! Please do not hesitate to contact me if I can help you
with anything in the future! All the best!

Cynthia



Mark Evans
02/23/2000 11:37 AM
To: Donette Dewar/HOU/ECT@ECT
cc: Anne Edgley/LON/ECT@ECT, Maroun J Abboudy/LON/ECT@ECT, Stephen
Dwyer/LON/ECT@ECT, AnnMarie Tiller/Corp/Enron@ENRON, James
Ginty/Corp/Enron@ENRON, Cynthia Harkness/HOU/ECT@ect
Subject: Re: Margaux - Whitewing Partnership amendment


Donette,

these questions need to be directed to the Whitewing legal team. I believe
this is Cynthia Harkness. I will then work with Cynthia to ensure her efforts
are coordinated with ours.


Mark







Donette Dewar
23/02/2000 17:19
To: Mark Evans/LON/ECT@ECT, Anne Edgley/LON/ECT@ECT, Maroun J
Abboudy/LON/ECT@ECT
cc: Stephen Dwyer/LON/ECT@ECT, AnnMarie Tiller/Corp/Enron@ENRON, James
Ginty/Corp/Enron@ENRON

Subject: Margaux - Whitewing Partnership amendment

As you may recall, the tax comments to the debt term sheet reflected a need
for an amendment to the Whitewing partnership agreement to admit ENA as a
partner. You also may recall that we briefly discussed the potential for
legal/accounting/other issues that may arise as a result of any such
amendment. So that the Whitewing process can be moved forward, would you
please consider the following:

1. Have any legal/accounting/other issues been identified as resulting from
an amendment to the Whitewing partnership agreement?

2. If so, what are the potential solutions to any such issues?

3. Have definite conclusions been reached regarding the economics of ENA's
preferred return on the Whitewing interest, such that a draft of the
necessary partnership allocations can be undertaken?

4. Has a decision been made regarding who will be charged with drafting the
amendments? Will it be the Margaux legal team? The Houston Global Finance
legal group? Other??

Thanks, in advance, for your consideration of these issues.

Kindest Regards,

DMD