Wow!  this looks complicated.  let me get some help on this and get back to you
-----Original Message-----
From: 	Allen, Phillip K.
Sent:	Friday, November 16, 2001 8:38 AM
To:	Whalley, Greg; Lavorato, John
Subject:	FW:
Greg,
After making an election in October to receive a full distribution of my deferral account under Section 6.3 of the plan, a disagreement has arisen regarding the Phantom Stock Account.
Section 6.3 states that a participant may elect to receive a single sum distribution of all of the participant's deferral accounts subject to a 10% penalty.  This provision is stated to be notwithstanding any other provision of the plan.  It also states that the account balance shall be determined as of the last day of the month preceding the date on which the committee receives the written request of the participant.  In my case this would be as of September 30th.  I read this paragraph to indicate a cash payout of 90% of the value of all deferrals as on September 30, 2001.  The plan administrators, however, interpret this paragraph differently.  Their reading yields a cash payout of 90% of the value for deferrals other than the Phantom Stock Account, which they believe should be paid with 90% of  Enron Corp. shares in the account as of September 30, 2001.  Their justification is that in several places throughout the plan document and brochures it is stated that the distributions of the Phantom Stock Account shall be made in shares of Enron Corp. common stock.
There are two reason that I do not agree with their interpretation.  First,  section 6.3 begins with "notwithstanding any other provision of the Plan."  This indicates that any other payout methodologies described in other sections of the plan which deal with normal distribution at termination do not apply.  Second, the language in section 6.3 stating "a single sum distribution of all of the Participant's deferral accounts" indicates that one payment will be made not a cash payment separate from a share distribution.
The interpretation of the administrators goes beyond section 6.3.  If that is the case then section 7.1 should apply.  This section does provide for the Phantom Stock Account to be paid in shares.  However, it states "The value of the shares, and resulting payment amount, will be based on the closing price of Enron Corp. common stock on the January 1 before the date of payment, and such payment shall be made in shares of Enron Corp common stock".  This would result in approximately 8.3 shares to be distributed for every share in the account on January 1, 2001.  Although this would be the most beneficial to the participants due to the decline of the value of Enron Corp. common stock from $83 to $10 per share,  this methodology goes beyond section 6.3.
The calculations below illustrate the difference in the value and method of distribution under each of the three interpretations:
Section 6.3		Plan Administrators		Section 7.1
Number of shares		6,600	shares		6,600	shares			6,600 shares
Relative share price		$27.23							$83.13
Phantom Stock Value		$179,718						$548,658
10% Penalty			-17,972			 -600				-54,866
Value to be distributed		$161,746		6,000 shares			$493,792
Current stock price									$10
Distribution			$161,746		6,000 shares			49,379 shares
I believe my interpretation under section 6.3 is correct and fair.  If the administrators insist on distributing shares instead of cash then section 7.1 should apply.  The current interpretation of the plan administrators is a hybrid between the two sections resulting in the lowest possible payout.
In addition to myself, Tom Martin, Scott Neal, and Don Black are facing the same issue.  I would appreciate your review and consideration of this matter.
Sincerely,
Phillip Allen


Phillip,
Thank you for meeting with us today. I want to take a few minutes to
summarize the decisions that came out of our meeting.
1. Feedback Approach: We will incorporate the ideas and suggestions you
gave us and move forward with this approach.
2. SME Review of Knowledge System Topics: When the time comes for Topics
reviews, we will send you the name of the SME who is responsible for
sign-off on each topic.
3. Conversion and Arbitrage Problems: We will brainstorm ways to
incorporate more problems without going over our 4-6 hour target. We will
meet with you next Tuesday at 10:00 to review the problems as we've
designed them so far and arrive at a solution. (I will send an e-mail
Monday with the room number.)
Have a good weekend.
Mery
This message is for the designated recipient only and may contain
privileged, proprietary, or otherwise private information.  If you have
received it in error, please notify the sender immediately and delete the
original.  Any other use of the email by you is prohibited.


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- DESIGNSELECTIONS_DyalRoberts.doc


For purposes of an accelerated distribution from the PSA,  a "single sum distribution," in Section 6.2 means that a PSA account is distributed all at once, as distinguished from another form of payout as may have been selected by a participant in his or her deferral agreement.
Section 6.2 is clear in that the account balance shall be determined as of the last day of the month preceding the date on which the Committee receives the written request of the Participant.  A PSA account balance is reflected in shares of stock since the form of distribution is shares of stock.
Additionally, any portion of a PSA balance attributable to deferral of restricted stock is administered under Sections 3.5 and 3.6 and Exhibit A of the Plan. This section is applicable now as we are accelerating the distribution of PSA balances created with deferrals of restricted stock.  The Plan indicates that upon death, disability, retirement or termination, the share units are converted to shares which are issued to the executive according to the payment election made by the executive at the time of the deferral election.
Therefore the distribution you will receive in shares is correct and we do not agree with your interpretation of the plan.


Phillip,
I will get a room for our Wednesday 10:00 meeting and e-mail you with the
room number. FYI, our goal is to discuss the expert path (best answers) for
the storage problem and to ask you some specific questions regarding
storage.
Also, if you have time, could you send me a definition of Intra-Month Risk?
Thank you for your help.
Mery
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To all of our esteemed & prized Internet Banking  (IBS) Clients:
You probably have begun to wonder does anyone ever return phone calls
(or e-mails). We really do but have been holed up trying to complete
this project ASAP. We knew that this might upset some clients, but we
found that this is the quickest way to fix this problem and get our
users back on-line.
We have finalized the movement of your customer account #s and re-linked
your additional accounts back to your primary Login ID (Acct #). This
process was more daunting than we anticipated and having to verify 1100
IBS users and account #s (to insure your data integrity and
confidentiality) was even more grueling than expected. After verifying
data and Login IDs, we believe that we are on the right track. Some of
you (our IBS clients) might notice your accounts displayed more than
once or additional accounts displayed that you may (or may not) want
displayed on your IBS screen. Should this be the case, please e-mail (or
phone) the information to us and we will remove this information right
away.
To our IBS Billpayer clients:
During this process, we seem to have misplaced (blown away) your bill
payment information (particularly anyone that has [had] reoccurring
payments scheduled to process on particular days). This has become our
highest priority to retrieve this information, thus alleviating the
process of having to request that our IBS Billpayers re-enter this
information. We are going to waive all bill payment charges for the
months of November & December, 2001 to try and regain your confidence
(and support).
Again, we deeply express our regrets and hope that we (yourselves and
ourselves) do not have to go through this process again. Should you be
one of our IBS clients that still has not gained access to your account
information, please refer to the following information:
1)  You have entered your password incorrectly (or what you thought was
the correct password) and been given the error message "You have failed
to correctly login three times today; please try again tomorrow, or
contact the bank at 830-379-5236 to have your password reset." This is
the easiest problem to correct and we can fix this one quickly with you
online (on the phone or by e-mail [our preferred method]). Should you
receive this message, please call our Computer Department and ask for
either myself (Howard Gordon) @ 830-401-1185, Christina Kirby @
830-401-1189, or Lora Robles @ 830-401-1182. If you reach our voice mail
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be directed to a screen that asks for information such as:
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Address
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After entering this information and clicking submit, you will then be
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Again we want to thank you for your patience through this (trying)
ordeal, and we look forward to serving your IBS needs in the future.
Sincerely,
Howard Gordon
Network Manager
- geninfo.vcf


Phillip;
Could you please e-mail me the draw file you created for Bishops Corner.  I
was working on submitting it to you and rather then recreate it I should
just have you send it back to me to fill in the new draw totals.
Also, I need the vendor payee list that you created for the Land and Soft
costs. I need to re-format it by draw number and to the Bank One format, and
again it would be easier to get it from you then to re-create it.
Please take a look at the following summary and compare to your numbers to
see if you agree.
Land And Soft Costs 	- 	Initial Draw	$	  1,608,683.05
Galaxy			-	Draw # 1	$	     250,000.00
Galaxy			-	Draw # 2	$	     223,259.09
Total Paid To Date Cash		$	  2,081,942.14
Project Cost					$	10,740,980.87
Loan Amount					$	  8,055,736.65
Equity Required				$	  2,685,244.22
Developer Profit					$	 (   326,202.57)
Balance Of Funding			$	  2,359,041.65
Total Paid To Date			$	  2,081,942.14
Balance To Fund Cash			$	     277,099.51
Galaxy			-	Draw # 3	$	     467,566.66
Bank One Draw # 1			$	     190,467.15
Final Cash Funding			$	     277,099.51
I think you thought you had more to fund. However, I do not see that you
accounted for the cash portion of the Developer fee that you paid CIS.  Am I
looking at this right? Please let me know and attach? the files discussed
above.  I am working all day Monday so I hope I can get it before then if
possible.
Thanks A Lot
Greg Thorse


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I have you buyiing 1000 NY Football Giants from me at $12 and paying Horowitz $8000 from which leaves a balance of  $4000. I can just get it sometime when I see you I just don't want to forget.


John
At your leisure can you interview this guy.  He is in Houston in a couple of weeks.  You may need him to resend his reume as I deleted it.  Read the email traffic below.
Thanks
-----Original Message-----
From: 	Alex Pritchartt
@ENRON
Sent:	Tuesday, September 11, 2001 1:02 AM
To:	Lavorato, John
Subject:	RE: friend of Bill McIlwain
John,
I appreciate your candor.  While I acknowledge my lack
of industry experience, I would have no problem
putting in needed time to gain a full knowledge of the
underlying products.  I'm not too proud or too old to
do my homework.
I would welcome the opportunity to talk with one of
your associates in more depth and am available at your
convenience.  I plan to be in Houston September 25-27
and have a pretty flexible schedule.  I can be reached
by phone at 415.776.3035 or 312.286.8977.
Thanks again for your feedback.
Best Regards,
Alex Pritchartt
--- John.J.Lavorato@enron.com wrote:
> Hi
>
> You have great experience trading.  We certainly
> need traders but you would
> need to spend a lot of time learning the industry.
> If you are up for this
> and up for moving to Houston I will have someone do
> a phone interview with
> you.
>
> Thanks
>
> John Lavorato
>
>     -----Original Message-----
>    From:   Alex Pritchartt
>
@ENRON
>
>
>
>
>    Sent:   Sunday, August 26, 2001 10:52 PM
>    To:     Lavorato, John
>    Cc:     bill mcilwain
>    Subject:  friend of Bill McIlwain
>
>    Dear John,
>
>    My friend, Bill McIlwain, suggested that I write
> you
>    in an effort to find out more about trading
>    opportunities in the energy field and more
>    specifically at Enron.
>
>    I have ten years experience in the trading
> business
>    primarily trading listed options on futures and
>    stocks.  I have traded both proprietary positions
> and
>    individual accounts as well as providing risk
>    management control for other traders in a
> corporate
>    environment.
>
>    I have attached a copy of my resume for your
> review.
>    I would appreciate the chance to talk with you at
> your
>    convenience about opportunities with Enron and
> the
>    overall energy market.  I can be reached by
>    email(alex_pritchartt@yahoo.com), phone
> (415.776.3035
>    or 312.286.8977), or fax (415.771.9035).
>
>    Thank you in advance for your consideration.
>
>    Best Regards,
>
>    Alex Pritchartt
>
>    =====
>    Alex Pritchartt
>    3725 Divisadero St.
>    San Francisco, CA 94123
>    415/776-3035 (home)
>    415/771-9035 (fax)
>    312/286-8977 (mobile)
>
>
> __________________________________________________
>    Do You Yahoo!?
>    Make international calls for as low as
> $.04/minute with Yahoo! Messenger
>
>     - alex_pritchartt_resume.doc
alex_pritchartt_resume.doc >>
>
>
>
>
**********************************************************************
> This e-mail is the property of Enron Corp. and/or
> its relevant affiliate and may contain confidential
> and privileged material for the sole use of the
> intended recipient (s). Any review, use,
> distribution or disclosure by others is strictly
> prohibited. If you are not the intended recipient
> (or authorized to receive for the recipient), please
> contact the sender or reply to Enron Corp. at
> enron.messaging.administration@enron.com and delete
> all copies of the message. This e-mail (and any
> attachments hereto) are not intended to be an offer
> (or an acceptance) and do not create or evidence a
> binding and enforceable contract between Enron Corp.
> (or any of its affiliates) and the intended
> recipient or any other party, and may not be relied
> on by anyone as the basis of a contract by estoppel
> or otherwise. Thank you.
>
**********************************************************************
=====
Alex Pritchartt
3725 Divisadero St.
San Francisco, CA 94123
415/776-3035 (home)
415/771-9035 (fax)
312/286-8977 (mobile)
__________________________________________________
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Happy New Year and best wishes.
- Energy010102.doc


John,
I would like to swap out some cal 04 with you.  We are long 2 a day with you
out there.  We are under new parameters here.  So this will allow us to
continue to trade with you.
Thanks,
Steve
302-452-6930


i hpe thingsa re ok for you.obviously a shit load of rumours circulating .
we both know youll be ok personally but cant be fun. if i can help you know
where im at. be cool


John,
As you are aware, there was some confusion on the 2 Peoples trades we did on 10/15/01.  We did not find out there could be a problem until yesterday, 15 days after the trade was input into the system.  I consider this unacceptable so I wanted to find out what happened to our processes internally.
A person named Richard in the physical confirm area was the one that let Amy know the trade wasn't a financial trade but a physical trade.  I called him to ask him why it took 15 days to find this out.  He said that the deal was entered into as a financial deal so he didn't know about the trade until yesterday.  The person in charge of financial confirms is Diane Anderson and I called her to ask what happened.  She said she didn't know but would check into it.  She left me a message yesterday evening saying that for about 5 days in October they were shorthanded and they didn't confirm any financial trades.  THIS IS UNACCEPTABLE,  especially in the situation we are currently in.  I haven't talked to her again but I wanted you to know about this.  Not to put any more problems on your desk, but this needs to be fixed.
Amy yesterday found a person at Peoples that knows the trades as we know them (financial).  So the trade is okay, but it could have been a $500,000 hit to Mike's book.
Please let me know if I can do anything.  Thanks.
John


Our initial proposal will be for them to keep all their commission and incremental float, and for Enron to keep our spread.  We have talked about it quite a bit and I expect that they will ask for more than this, but we would hesitate giving them the ability to widen our spreads as this could work against the venture if they got too greedy.  Do you have a preference to work into the negotiation?
JC
-----Original Message-----
From: 	Arnold, John
Sent:	Tuesday, October 30, 2001 5:41 PM
To:	Cummings, John
Subject:	RE: Refco Update
Are we proposing to pay refco for order flow, like a tick per trade, or are we going to give them our prices and then they widen them to add their juice?
-----Original Message-----
From: 	Cummings, John
Sent:	Tuesday, October 30, 2001 2:06 PM
To:	Arnold, John; Nowlan Jr., John L.; White, Bill; Goughary, Jim; Wilson, John L.
Cc:	Shults, Bob; Eichmann, Marc; Richter, Brad; Palmer, Mark S. (ENW)
Subject:	Refco Update
Gentlemen
We met last week with their management and CTO. We have determined the hardware and software requirements for the deal.  We are in the process of drawing up a term sheet and proposing a financial structure.  We have set a meeting for Nov 12 in NYC to get into the details of financial terms and structure.
The deal is going well and we are working with the following hi-level parameters:
Initially 8 Nymex look-a-like-products: Natural Gas (prompt, prompt+1, prompt+2), WTI (prompt), Gasoline (prompt, prompt+1), Heating Oil (prompt, prompt+1)
2 customer buckets with different spreads and volumes: Institutional and Retail
Volumes for Institutional will be 1 contract moving towards 0.5 contract and 0.2 contract possibly to match Nymex mini concept, Volumes for retail will be 0.5 contracts moving to 0.2 contract to match Nymex mini concept
Data feed with price and volumes sent from EnronOnline to Refco system customized and powered by EnronOnline software
Initially target scope is designed for a capacity of 5000 customers, 500 simultaneous
Refco will take credit risk for their customers and post daily collateral with Enron
Refco will pay Enron a one-time license fee for a 3 year contract with an additional annual maintenance & support fee
Enron will keep all additional margin generated by the transactions and Refco will keep the commissions generated and float from additional margin held.
Obviously, the above parameters are the preliminary thoughts and subject to change and negotiation.  We are just beginning to model the potential revenue and cost streams and there will likely be some adjustments that will come out of this exercise.  There are also a number of alternative technology scenarios to pursue if we have more or less money to work with.
Please feel free to call me x36413 if you have any questions or comments.
Regards
John Cummings


All:
Attached you will find a list that reflects your seat assignments for Business Continuity Planning (BCP).  These seats are located on the 30th and 31st Floors of Enron Center North (ECN).  As previously communicated, you will report to these designated seats in the event of an outage in ECS.
The exception to this is as follows:
If your seat assignment is located on the 31st Floor, you will report to your original location that you occupied prior to your move into ECS.  This will hold true until the Monday after Thanksgiving, as we will have the 31st floor seats set up at that time.
Testing:
Once you have moved to ECS, if you would like to test your BCP location, you will be able to test your seat for functionality every Thursday from 3-6pm.  Testing is not required, but is highly recommended.
If anyone has any questions or concerns about these procedures, please feel free to contact me at any time.
Regards,
Stephen R. Harrington
Technical Project Manager, ECS Project
Enron Net Works, LLC
w:  713-853-7619
p:  877-651-7361
c:  713-444-7279
stephen.harrington@enron.com


Don't make me pull tapes on whether you understood our fee...j.a. Always
understands.  Happy to help you guys anyways (I know you'll thank me later)
J. Robert Collins
BCollins@NYMEX.com
--------------------------
Sent from my BlackBerry


I agree.  Lavorato has made it official that nothing goes out without his approval, as has all traders.  David Port requested that I continue to monitor option book so that was reason for my request.  No external parties involved.
Frank
-----Original Message-----
From: Arnold, John
Sent: Wednesday, November 14, 2001 8:54 PM
To: Hayden, Frank
Subject: FW: Slide reports
Frank:
Can you explain in detail the reasons you need this info.  Not that I don't trust you, but I won't release this data to anybody unless I know the rationale.
John
-----Original Message-----
From: Griffith, John
Sent: Tue 11/13/2001 9:04 AM
To: Maggi, Mike; Arnold, John
Cc:
Subject: FW: Slide reports
FYI
-----Original Message-----
From:   Hayden, Frank
Sent:   Tuesday, November 13, 2001 9:02 AM
To:     Griffith, John
Subject:        RE: Slide reports
Thanks.
Currently it is for my own purpose.  Lavo wants heads up on everything before it goes external
Frank
-----Original Message-----
From:   Griffith, John
Sent:   Tuesday, November 13, 2001 8:55 AM
To:     Hayden, Frank
Subject:        RE: Slide reports
The problem probably relates to the Exotica add-in.  Do you have that add-in?
Also, are you looking at the position for your own purposes or is someone asking about them?
Thanks.
John
-----Original Message-----
From:   Hayden, Frank
Sent:   Monday, November 12, 2001 5:49 PM
To:     Griffith, John
Subject:        Slide reports
John,
I'm going into Financial trading/position directory and when I open file the macro's crash.  Am I in the right file/directory?
Thanks
Frank


John,
David's feedback regarding looking at option book...
Frank
PS. The free lunch for me ends Monday, care to intercede with Ina, she's tough?
-----Original Message-----
From: Port, David
Sent: Thursday, November 15, 2001 8:38 AM
To: Hayden, Frank
Subject: RE: Slide reports
we just need to understand the option position - its not for external consumption - just our own
in particular the funding implications of close to expiry options etc.
-----Original Message-----
From: Hayden, Frank
Sent: Thursday, November 15, 2001 7:46 AM
To: Port, David
Subject: FW: Slide reports
-----Original Message-----
From: Arnold, John
Sent: Wednesday, November 14, 2001 8:54 PM
To: Hayden, Frank
Subject: FW: Slide reports
Frank:
Can you explain in detail the reasons you need this info.  Not that I don't trust you, but I won't release this data to anybody unless I know the rationale.
John
-----Original Message-----
From: Griffith, John
Sent: Tue 11/13/2001 9:04 AM
To: Maggi, Mike; Arnold, John
Cc:
Subject: FW: Slide reports
FYI
-----Original Message-----
From:   Hayden, Frank
Sent:   Tuesday, November 13, 2001 9:02 AM
To:     Griffith, John
Subject:        RE: Slide reports
Thanks.
Currently it is for my own purpose.  Lavo wants heads up on everything before it goes external
Frank
-----Original Message-----
From:   Griffith, John
Sent:   Tuesday, November 13, 2001 8:55 AM
To:     Hayden, Frank
Subject:        RE: Slide reports
The problem probably relates to the Exotica add-in.  Do you have that add-in?
Also, are you looking at the position for your own purposes or is someone asking about them?
Thanks.
John
-----Original Message-----
From:   Hayden, Frank
Sent:   Monday, November 12, 2001 5:49 PM
To:     Griffith, John
Subject:        Slide reports
John,
I'm going into Financial trading/position directory and when I open file the macro's crash.  Am I in the right file/directory?
Thanks
Frank


Here are the positions that you requested from John.


All -
In preparation for another round of Trading Track interviews for the ENA group, please be aware of the following dates...
October 10 - October 16 :  Initial phone interviews by two traders for External candidates.
October 24, 3:00 - 6:00pm :  Final interviews for internal and external candidates.
Please send either Karen Buckley or me the names of internal individuals who you feel would be a great candidate for the ENA Trading Track.
We look forward to your active participation.
Kind regards,
Adrianne Engler
Human Resources
x57302


Attached is the list of employees who should be allowed access to ECS on Sunday afternoon to test trading applications and for access to the Office of the Chair.
Thanks!
Tammy


John,
I called Ben and left a msg to call you in reagrds to the below email.
Dutch
-----Original Message-----
From: 	Thomason, Ben
Sent:	Friday, November 16, 2001 9:55 AM
To:	Quigley, Dutch
Cc:	Burkhart, Paul; Araoz, Jaime
Subject:	ENA Q4 Settlement
Dutch,
I am working on pulling together due diligence information for Global Finance in regards to ENA trading activity.  One number that stood out to us on the ENA PRMA detail was the Q4 2000 settlement of approximately negative $500MM.  We discussed possible reasons for this figure with the ENA accounting group, and they suggested it might be the Dec 2000 Nymex settlement, which was more that negative $600MM.  They suggested that I could contact you for further insight.  Would you have a few minutes sometime today to talk about that settlement?
Thanks,
Ben
5-2047


I need to give you a task.  Figure out what I lost last week.
Also, why don't we have the rest of month henry hub swap up on weekends.
this week
150 each
indi +5.5
jets +5.5
phili -7
seattle -3.5
tenn +2
sd +9
jack +5.5 -----> 250
st louis -8
st louis/ne england over 46.5


John,
As discussed, the AIG exposure is $57MM, and it is distributed among the price, option, and exotic books.
The attached spreadsheet details the dollar value and volume by month by book.  Please call if you have questions.
Tanya


Well the way things are going around here lately I may want to cut my losses with the Big E and take my skills elsewhere.  Know any good headhunters?  :-)
Kristin Gandy
Freight Markets
Enron Global Markets
1400 Smith Street ECS 3657
Houston, Texas  77002
713-853-7263
kristin.gandy@enron.com
>  -----Original Message-----
> From: 	Arnold, John
> Sent:	Wednesday, November 21, 2001 8:40 AM
> To:	Gandy, Kristin
> Subject:	RE:
>
> The reason I asked is, this sounds bad, but right now the
> cheaper you are the easier time I'll have finding you a job.
>
>  -----Original Message-----
> From: 	Gandy, Kristin
> Sent:	Wednesday, November 21, 2001 8:30 AM
> To:	Arnold, John
> Subject:	RE:
>
> John,
>
> Thanks for the note back.  My title is Specialist so I am the
> little man on the trading floor, but since I have been here I
> have been kicking ass.  I enjoy trading and really didn't get
> the chance to dig into it deep.  Anyway, take care and have a
> Happy Holiday.
>
> Kristin Gandy
> Freight Markets
> Enron Global Markets
> 1400 Smith Street ECS 3657
> Houston, Texas  77002
> 713-853-7263
> kristin.gandy@enron.com
>
> >  -----Original Message-----
> > From: 	Arnold, John
> > Sent:	Wednesday, November 21, 2001 7:25 AM
> > To:	Gandy, Kristin
> > Subject:	RE:
> >
> > Kristin:
> > Sorry for the delay.  Unfotunately I don't have any openings
> > in my group right now.  If I hear of any positions open I'll
> > give you a shout.  Can you remind me what title you have now.
> > John
> >
> >  -----Original Message-----
> > From: 	Gandy, Kristin
> > Sent:	Monday, November 19, 2001 9:00 AM
> > To:	Arnold, John
> > Subject:
> >
> > John,
> >
> > Hello and good Monday morning to you.  I briefly meet you
> > while talking to Paul Racicot on Friday at Front Porch Pub.
> > With Matt working here in Freight you probably already know
> > we are not well off these days.  Next on the chopping block
> > is never a good place to be.
> >
> > This is a forward question but what the hell.  I was
> > wondering if you knew of any positions available in your
> > area.  If you can believe it I am not ready to leave Enron
> > behind yet.  Thanks for your help.
> >
> > Regards,
> >
> > Kristin Gandy
> > Freight Markets
> > Enron Global Markets
> > 1400 Smith Street ECS 3657
> > Houston, Texas  77002
> > 713-853-7263
> > kristin.gandy@enron.com
> >


The following reports have been waiting for your approval for more than 4 days.  Please review.
Owner: Justin K Rostant
Report Name: Rostant 112001
Days In Mgr. Queue: 5


As our last day is Friday, November 30th, we would love to toast the good times and special memories that we have shared with you over the past five years.  Please join us at Teala's (W. Dallas) on Thursday, November 29th, beginning at 5pm.
Looking forward to being with you,
Lara and Janel
Lara Leibman
713.851.7770 (cellular)
713.528.5281 (home)
lleibman@houston.rr.com
Janel Guerrero
713.851.3778 (cellular)
713.524.1534 (home)
travelgirl_janel@hotmail.com


morning
i sent you a bunch of bloombergs from ospraie..the most recent is the most relevant..what's your response to it?


-----Original Message-----
From: Cernosek Jr., Frank
Sent: Monday, November 26, 2001 8:46 AM
To: Quigley, Dutch
Subject: Margin by Commodity 11/19/01 Trade Date
Dutch,
We are in the process of updated Tuesday/Wednesday activity and will send when completed. Anticipated completion 10:00am today....
Frank F. Cernosek
Exchange Accounting
Financial Operations
713-853-1581


Gentlemen
I wanted to provide you an update on the status of the Refco private label platform deal.  We have had several meetings since I first presented the idea to you all.  Unfortunately, Refco's headquarters was in One World Financial Center which was severely damaged by debris from the World Trade Center collapse.  They suffered no human losses from the disaster, but their offices are off limits and all their computers and paper files are inaccessible for the time being.  They are up and running out of a Jersey City location with some back up capability.
To briefly summarize the discussion so far, ENW would build a Refco branded platform similar to EOL that would be accessed by Refco's customers.  Enron would provide transactable prices to the site with wider spreads and potentially smaller minimum volumes.  Refco customers would transact on the site with Refco as their counterparty and Refco would sleeve the transactions to Enron allowing us to consolidate our credit risk to a singular credit, Refco.   The products contemplated include various Nymex look-a-like products and other liquid swaps in oil, natural gas, and electricity.  Revenue would come to Enron in the form of license fees for the platform, transaction fees, and origination from the additional volume create by the wider margin products.  Revenue would come to Refco in the form of transaction fees.  Refco has a similar arrangement in place for FX with Dresner bank and have announced a similar platform for bonds and securities with Cantor Fitzgerald/E-speed.
All that being said, they are anxious to move the discussion forward and we have planned a visit for them to come to Houston in 2 weeks.  Attending will be Gary Weiss, SVP Refco Group Ltd. LLC and President & CEO of Refco F/X Ltd LLC, and Joe Murphy, CEO Refco Futures Ltd. LLC.  The purpose of this visit is for them to give us a presentation on the Refco Group of companies, discuss the products and estimations of revenue streams based on their current futures business, and discuss the possible structure of the deal.  The meeting is scheduled to begin at 2:30pm Thursday Oct 4 and expected to last the balance of the day and possibly into the next morning.  I will approach you all individually to get your feedback on how you would like to interact with them and when.  I realize there are significant issues to be addressed.
Refco currently has some 175,000 collateralized customer accounts ranging from Institutional Investors & locals down to individuals.  We have put these into 2 buckets which have different profiles.  Phase 1 would include the Top 2000 accounts which are largely substantial institutional investors, locals, and high net worth individuals.  If this proves successful, phase 2 would be rolled out with products designed to attract activity from the smaller investors.  The idea would be to automate the products as much as is practical.
Mark Tayor in Legal has already spoken with their counsel and is comfortable that they have reviewed all the legal angles thoroughly.  Refco advises that if the have accounts back up by collateral guaranteed by them, they become Eligible Contract Participants (ECPs) able to execute derivatives.  So, they believe that the majority of the 175,000 accounts they have could be ECPs for the purposes of this deal.  Credit is reviewing the Refco financials and we plan to discuss this thoroughly during their visit.
Please do not hesitate to contact me at x36413 if you have any questions or comments and I will be getting in touch with you early next week to get your feedback.
Regards
John Cummings


John - you may have already heard this but on Friday, NYMEX increased margins for clearing brokers posting for Enron by 50%.  Also Soc Gen cancelled their margin line on Friday (Warren wants to make it very clear that it was Soc Gen and not Fimat.)  So far, Fimat is not reducing its trading limit with us but is passing through the NYMEX requirement.  All of our brokers will have the right to do this and I expect them to do so.  Sarah


I'll be there in spirit if not in person.  Cheers to all!!
-----Original Message-----
From: Leibman, Lara
Sent: Monday, November 26, 2001 5:52 AM
To: Shapiro, Richard; Steffes, James D.; Dernehl, Ginger; McVicker, Maureen; Kean, Steven J.; Linnell, Elizabeth; Binns, Darran; O'connell, Earlene; Sullivan, Kathleen; Ibrahim, Amr; Petrochko, Mona L.; Gottfredson, Bryan; Dolezal, Regan; Enochs, Fred; Racicot, Paul; Garrett, Bryan; Phillips, George; Philipp, Meredith; Denne, Karen; Palmer, Mark A. (PR); Palmer, Sarah; Clark, Mary; Votaw, Courtney; Schmidt, Ann M.; Richter, Brad; Piper, Greg; Woulfe, Greg; Frey, Gunnar; La, Nicole; Marshall, Lucy; Fallon, Jim; Edison, Susan; Sidler, Shirley; Zimmerman, Grant; Schneider, Richard; Barnes, Corbin; Harris, Michael; Santikos, Mark; Harkness, Cynthia; Hicks, Michelle; Rossi, Robbi; Gardner, Wayne; Gartner, Julie S.; Gresham, Wayne; Mcgowan, Kevin; Hochschild, Lenny; Wilhite, Jane; Clayton, Paul; Puchot, Paul; Koogler, David; Madaras, Tom; McDonald, Rob; Heintzelman, Pete; Arnold, Matthew; Arnold, John; Noble, Ted; Korioth, Ann; Tobor, Rachael; Kalmans, Elyse; Olson, Cindy; Shankman, Jeffrey A.; Reck, Daniel; Metcalf, Kellie; Charvel, Ricardo; Brown, Jeff; Bolton, Stacey; Huson, Maggy; Perez, Carmen; Nord, Sue; Reyna, Margo; Barnes, Lynnette; Lawrence, Linda L.; Noske, Linda J.; Yeung, Charles; Burns, Stephen; Robertson, Linda; Hartsoe, Joe; Hardy Jr, John; Rizzo, Helen; Hawkins, Bernadette; Novosel, Sarah; Fulton, Donna; Cooney, Carolyn; Sullivan, Lora; Long, Chris; Buerger, Rubena; Kingerski, Harry; Keene, Patrick; Ogenyi, Gloria; Frank, Robert; Neustaedter, Robert; Pharms, Melinda; Moore, Bill; Allen, Joe; Mara, Susan; Dasovich, Jeff; Montovano, Steve; Migden, Janine; Rishe, Frank; Ferlic, Suzanne; Reinfeld, David; Spector, Brian; Seeligson, Stewart; Woody, Rus; Manuel, Scott; Jachimiak, Matthew; Sheldon, Steven; Kaufman, Paul; Perlman, Beth; Wenz, Michelle; Lindberg, Susan; Roan, Michael; Nicolay, Christi L.; Warner, Geriann; Alamo, Joseph; Lawner, Leslie; Allegretti, Daniel; Boston, Roy; Hueter, Barbara A.; Stroup, Kerry; Jacobson, Lisa; Baxter, Ashley; Pollock, Adam; Pagan, Ozzie; Lewis, William Patrick; Bradley, Rob; Benson, Eric; Hemstock, Robert; Chapman, Tom; Hetrick, Nancy; Fromer, Howard; Floris, Vinio; Levy, Alberto; Kishigami, Kikumi; Knight, Laurie; Landwehr, Susan M.; Mangskau, David; Hamilton, Allison; Palmer, Germain; Robinson, Marchris; Stransky, Joan; Hartfield, Rita; Twiggs, Thane; Letzerich, Palmer; Watanabe, Luiz; Walton, Steve; Grimes, Michael; Grant, Fiona; Stephens, Sharonda; Perez, Gus; Sarkissian, Arshak; Suarez, John; Cantrell, Rebecca W.; Burton, Katrina; Miles, Andrew; Arnell, Doug; Marvin, Michele Nezi; Wapner, Beth; Estrada, Roger; Masani, Zal; Hill, Jo Ann; Thome, Jennifer; Thome, Stephen; Costello, Zachary; Commons, Matthew; Hilgert, Chris; Lebeau, Paul; Walt, John; Warner, Traci; Lemmons Jr., Billy; Reichelderfer, Thomas; Magruder, Kathleen; Merola, Becky; Derecskey, Cindy; Williams, Robert C.; Parks-Foutch, Michelle; Edison, Andrew; Corman, Shelley; King Jr., Frazier; Baker, Marilyn N; Barbarawi, Moe; Betzer, Evan; Leff, Dan; Maurer, Luiz; Cross, Edith; Mainzer, Elliot; Martin, Amanda; Matamoros, Joseph; Mcconnell, Mike; Siegel, Misha; Schwartz, Laura; Taylor, Gary; Andraca, Marc; Snyder, Brad J.; Capestany, Mari; Wagner, Joseph; Lewis, James W.; Persson, Roger; Baukney, Scott; Aucoin, Berney C. ; Golden, Jeff; Brown, Michael (EES); Massey II, John; Woods, Trevor; Ferrara, Julie; Gilbert-smith, Doug; Coulter, Kayne; Dean, Clint; Pizzolato, Paul; Litton, Todd; McCaffrey, Deirdre; Konur, Sanjay; Wagner, Vincent; Gupta, Gautam; Mulholland, Sarah; Rigney, Brandon; Reagor, Rodney; Huertas, Alfredo; Canovas, Guillermo; Alvarez, Ray; Bestard, Jose; Comnes, Alan; Ingersoll, Richard; Hoatson, Tom; Shelk, John; Shortridge, Pat; Staines, Dan; Ryall, Jean; Haizmann, Jan; Wilson, Angela; Duffy, Matthew; Kimberly, Kelly; James, Terrie; Curran, Greg; Sharp, Vicki; Buchanan, Harold; Van Gelder, John; Van Chau, Michael; Felix, Bob; Franz, Kathy; Caplan, Ilan; Mansfield, Shelly; Vann, Suzanne
Cc: Guerrero, Janel; Leibman, Lara
Subject: Farewell Drinks
As our last day is Friday, November 30th, we would love to toast the good times and special memories that we have shared with you over the past five years.  Please join us at Teala's (W. Dallas) on Thursday, November 29th, beginning at 5pm.
Looking forward to being with you,
Lara and Janel
Lara Leibman
713.851.7770 (cellular)
713.528.5281 (home)
lleibman@houston.rr.com
Janel Guerrero
713.851.3778 (cellular)
713.524.1534 (home)
travelgirl_janel@hotmail.com


-----Original Message-----
From: Gosnell, Gerri
Sent: Monday, November 26, 2001 11:20 AM
To: Quigley, Dutch
Subject: FW: Hello!
Hope this helps!
gg
-----Original Message-----
From: Shoup, Cynthia
Sent: Fri 11/23/2001 10:11 AM
To: Gosnell, Gerri
Cc:
Subject: Hello!
It's Friday, and I'm here settling Nymex.  I got a phone call from Evelyn Wednesday before Thanksgiving to come in today.  It's o.k.  I don't mind.  I get Monday off.  Just a few notes to let you know what's going on.  EDF Mann, Paribas and Carr Futures London pulled a fast one.  They set the margin at 150% more of what it would have been.  Here are the numbers incoming and outgoing.
OUTGOING
Smith Barney Financial                  $232,499.00
Paribas                                 $46,026,588.00
EDF Mann                                $760,515.00
Carr Futures                            $12,331,010.66
INCOMING
ABN Amro                                $33,852.00
Saul Stone                              $19,800.00
HSBC                                    $291,325.00
HSBC Canada                             No Margin Call
R. J. Obrien                            $12,320.00
J.P. Morgan                             $292,827.00
Credit Suisse                           $200,261.00
Lori at Smith Barney was not in Friday, so we did not settle.
FIMAT was not in, and the numbers came out like this.  They were supposed to have paid down on the loan by $2,931,087.24.  I don't know how you handle this.  Hopefully they will do this on Monday.
I know this is a terrible welcome back, but it was something that had to be done.


-----Original Message-----
From: 	Sweitzer, Tara
Sent:	Monday, November 26, 2001 12:46 PM
To:	Puthigai, Savita; Denny, Jennifer; Moorer, Torrey; Johnson, Adam; George, Fraisy
Subject:	FW: TOP 50 GAS CPS - AS OF 11-21-01
Savita,
This report has been reviewed.  It is ready to be sent out.
Thanks
TARA


John,
I am performing code updates to the stand-alone EOL workstation WNAEOL-48101 this evening and wanted to check with you to see at which point it would be convenient for you.  I assume after the business day would be acceptable and my intent is to start near 6:00 p.m. or, at any time you decide is convenient for you.
I called a short while ago and will do so again before proceeding, but if you receive this email and need to contact me, you may reach me at extension 5-7004.  Thanks.
Chris Jeska
Terminal Server Operations.


John,
It appears that you have StackManager up an running.  Discretion being the better part of valor, I will put the code update on hold pending an okay from you.  I will be in early tomorrow morning and coordinating with your desktop support staff as well.  Thanks.
Chris
-----Original Message-----
From: 	Jeska, Christopher
Sent:	Monday, November 26, 2001 5:20 PM
To:	Arnold, John
Subject:	EOL Code Update
John,
I am performing code updates to the stand-alone EOL workstation WNAEOL-48101 this evening and wanted to check with you to see at which point it would be convenient for you.  I assume after the business day would be acceptable and my intent is to start near 6:00 p.m. or, at any time you decide is convenient for you.
I called a short while ago and will do so again before proceeding, but if you receive this email and need to contact me, you may reach me at extension 5-7004.  Thanks.
Chris Jeska
Terminal Server Operations.


Tracy called me at work.  A water pipe broke under the street between her house and the old Hamilton house.  She said water was shooting everywhere and that they were to turn off the water for at least 5 hours.  Well, they worked fast because when I got home at 6:00, I had water.  So I made some turkey soup.  But Willow Lane will be torn up for a while as it just buckled the cement.  The hole was about 7 feet down according to Tracy.  Good thing this didn't happen on Thanksgiving!  I have a foundation man coming out next week to check the foundation.  Tracy seems to have a similar problem.  Maybe we can get a two for one deal.    John, I need your book list at Amazon.com this week.  No excuses!  Oh, tell Jeannie that I finished her soup this evening for dinner.  She's a good cook!  Have a good week guys.  Love, Mom


The following reports have been waiting for your approval for more than 4 days.  Please review.
Owner: Justin K Rostant
Report Name: Rostant 112001
Days In Mgr. Queue: 6


Flight is at 2:35 PM Friday.  We arrive back at 4:40 PM Monday.
-----Original Message-----
From: John.Arnold@enron.com
Sent: Tuesday, November 27, 2001 11:25 AM
To: Jennifer.White@OceanEnergy.com
Subject: RE:
give her my email.
when are we leaving?
-----Original Message-----
From:   "White, J. (Jennifer)"
@ENRON
Sent:   Tuesday, November 27, 2001 9:59 AM
To:     Arnold, John
Subject:
Kelly Busch (from Energy Argus) asked for your contact info.  Is it OK
to
give it to her?  Email and/or cell?
The information contained in this communication is confidential and
proprietary information intended only for the individual or entity to
whom
it is addressed.  Any unauthorized use, distribution, copying, or
disclosure
of this communication is strictly prohibited.  If you have received this
communication in error, please contact the sender immediately.  If you
believe this communication is inappropriate or offensive, please contact
Ocean Energy`s Human Resources Department.
**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************
The information contained in this communication is confidential and
proprietary information intended only for the individual or entity to whom
it is addressed.  Any unauthorized use, distribution, copying, or disclosure
of this communication is strictly prohibited.  If you have received this
communication in error, please contact the sender immediately.  If you
believe this communication is inappropriate or offensive, please contact
Ocean Energy`s Human Resources Department.


Good morning my SLED. How's it going? Just woke up...I know. I know. Must be
nice. Anyway, Just wanted to leave you a quick message before I get out of
here. Thanks for dinner. I had a really good time and it was good to meet
cha in person.
Have a great day!!
d
>From: John.Arnold@enron.com
>To: danaggie@hotmail.com
>Subject: RE:
>Date: Fri, 21 Sep 2001 15:21:20 -0500
>
>I'm running out the door to go drinking with the boys at front porch, right
>next to my apartment.
>
>I don't think your dad would like me so much.  Will explain later.
>
>Sorry about your day.  Maybe you can find some happiness in the book of
>prayers.  Maybe you can find more happiness in the money.
>
>Talk to you later.
>
>     -----Original Message-----
>    From:   "Dana P"
@ENRON
>
>
>
>
>    Sent:   Friday, September 21, 2001 2:54 PM
>    To:     Arnold, John
>    Subject:  Re:
>
>    Sure, just remind me. It should cut down on your "depends" expenses as
>    well...
>
>    Today. Definitely in the top 10 as far as crappy days go. Started out
>    great.
>    Breakfast with Dad was nice (LePeep by my house). He was very happy I
>    broke
>    up with the energy guy. Wasn't too keen on him being Jewish. Dad's
>    pretty
>    religious in his elder years. Gave me a book of prayers and
>    money....That's
>    what I'm talkin' about!! (I'm going to he@@). Anyway, my boss calls me
>    as we
>    are finishing up and asks me if I knew anything about a meeting I was
>    supposed to be working for NP's (nurse practitioners) at the Westin and
>    I'm
>    like "Uh, No...never got the message". Well, never got the message
>    because
>    she never sent it. Bottom line, I had to blow off all my plans(I was
>    actually planning on calling on doctors today and getting ready for my
>    monday program) and go work this meeting which isn't that big of deal.
>    We
>    just stand around at display tables and answer questions from the
>    doctors/NP's. I was there for and hour and then went to lunch. I came
>    back
>    for an hour and have to do some things here. The good thing about my
>    boss is
>    she's very "hand's off". She stays out of your business unless you call
>    her
>    for something. She has a life outside of this job which is rare for
>    managers. The bad thing is she can be "flighty" sometimes and forgets
>to
>    send things on or lets them pile up and we get the messages a week late
>    (which is probably what happened in this case)
>
>    Anyway, sorry about all the griping but I was on a roll!!
>
>    Hope your day has been good. You workin' out or goin' out after work?
>    Decisions. Decisions. Your gym sounds cool. Laughed at the physique
>    comment.
>    So something I would have said.
>
>    Later,
>
>    d
>
>
>    >From: "Arnold, John"
>    >To:
>    >Date: Fri, 21 Sep 2001 10:42:44 -0500
>    >
>    >P.S. - Can you bring me some free samples of the bladder control
>    >medicine.  It'll save me some money.
>    >
>    >
>    >**********************************************************************
>    >This e-mail is the property of Enron Corp. and/or its relevant
>    affiliate
>    >and may contain confidential and privileged material for the sole use
>    of
>    >the intended recipient (s). Any review, use, distribution or
>disclosure
>    by
>    >others is strictly prohibited. If you are not the intended recipient
>    (or
>    >authorized to receive for the recipient), please contact the sender or
>    >reply to Enron Corp. at enron.messaging.administration@enron.com and
>    delete
>    >all copies of the message. This e-mail (and any attachments hereto)
>are
>    not
>    >intended to be an offer (or an acceptance) and do not create or
>    evidence a
>    >binding and enforceable contract between Enron Corp. (or any of its
>    >affiliates) and the intended recipient or any other party, and may not
>    be
>    >relied on by anyone as the basis of a contract by estoppel or
>    otherwise.
>    >Thank you.
>    >**********************************************************************
>
>
>    _________________________________________________________________
>    Get your FREE download of MSN Explorer at
>
>
>
_________________________________________________________________
Get your FREE download of MSN Explorer at


John-
Was lovely meeting  you this weekend. Sorry I was...less then effusive by Sullivan's. It wasn't  the company -- I assure you.
And what about this  white elepha...trading floor? I want to get it while it  lasts.
look forward to  it
-Kelly
Kelly C. Busch
Market Analyst
Energy Argus
713 622 3996 x109kbusch@energyargus.com


-----Original Message-----
From: 	Sweitzer, Tara
Sent:	Tuesday, November 27, 2001 12:57 PM
To:	Puthigai, Savita; Denny, Jennifer; Moorer, Torrey; Johnson, Adam; George, Fraisy
Subject:	FW: TOP 50 GAS CPS - AS OF 11-26-01
Savita,
This report has been reviewed.  It is ready to be sent out.
Thanks
TARA


-----Original Message-----
From: Dalia, Minal
Sent: Tuesday, November 27, 2001 1:53 PM
To: Davenport, Lacrecia; Hayden, Frank; Port, David; Hagelmann, Bjorn; Khanna, Bharat
Subject: FW: CNN show about Enron
-----Original Message-----
From: Gustafson, Mollie
Sent: Tuesday, November 27, 2001 9:35 AM
To: DL-Portland World Trade Center
Subject: FW: CNN show about Enron
FYI?
-----Original Message-----
From: Thome, Stephen
Sent: Tuesday, November 27, 2001 9:33 AM
To: Gustafson, Mollie
Subject: FW: CNN show about Enron
Note that there will be a show on CNN about Enron today at 6pm (Eastern)
AIRS
6:00 p.m. ET on CNN, CNNfn
Replays at 10 p.m. ET on CNNfn
Tuesday, November 27, 2001
What to do when your company's stock has dropped 90 percent? Find out how a Houston energy company is making a comeback and moving forward on a controversial buyout. Join Lou Dobbs for a report on the troubles at Enron.
Click here
for CNN.com's complete coverage


Enron Fights To Find Near-Term Sellers,But Still Trading
Dow Jones Energy Service, 11/27/01
USA: UPDATE 3-Dynegy says in talks on Enron merger structure.
Reuters English News Service, 11/27/01
RPT Dynegy confirms in talks on structure of Enron merger deal
AFX News, 11/27/01
Merger Traders Wary Even If Enron, Dynegy Cut New Terms
Dow Jones News Service, 11/27/01
Dynegy confirms in talks on structure of Enron merger deal
AFX News, 11/27/01
STOCKWATCH Enron slightly higher on hopes for new deal price
AFX News, 11/27/01
IN THE MONEY: Hedge Funds Say Yes To New Enron Terms
Dow Jones News Service, 11/27/01
Dynegy Confirms Talks On Enron Deal Structure - Source
Dow Jones News Service, 11/27/01
USA: Enron shares down despite talk of new Dynegy deal.
Reuters English News Service, 11/27/01
Enron Credit Rating to Remain Unchanged for Today, Moody's Says
Bloomberg, 11/27/01
Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle
Bloomberg, 11/27/01
Liberty Funds Analyst Paik Comments on Dynegy and Enron Talks
Bloomberg, 11/27/01
A.G. Edwards Analyst Heim Comments on Dynegy and Enron Talks
Bloomberg, 11/27/01
Commerzbank Analyst Meade Comments on Dynegy's Talks With Enron
Bloomberg, 11/27/01
ENRON SHARES RECOVER FROM A.M. SLUMP
CBS.MarketWatch.com, 11/27/01
Enron In Free Fall
Forbes.com
Enron Fights To Find Near-Term Sellers,But Still Trading
By Mark Golden
Of DOW JONES NEWSWIRES
11/27/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Enron Corp. (ENE) continued to struggle Tuesday to find willing sellers of near-term gas and power in North America, but the one-time market maker was still able to trade on a limited basis, according to market sources.
"It's not getting any better," said one major energy broker.
Many energy trading companies aren't selling to Enron and are only buying from it near-term. These include Aquila Inc. (ILA), Mirant (MIR), Royal Dutch/Shell Group (RD) subsidiary Coral Energy, Sempra Energy (SRE), and Morgan Stanley Dean Witter's energy trading subsidiary, said the broker. The broker estimated Enron's over-the-counter trading volume to be about 25% of what it was a month ago. Companies are willing to buy from Enron in the spot gas and power markets, because taking delivery on commodity and paying for it a month later poses no credit risk for the buyer.
Some other companies, like Dynegy Inc. (DYN), Duke Energy Corp. (DUK) and BP PLC. (BP), continue to trade with Enron fairly freely, the broker said. Dynegy has reached an agreement to acquire Enron, though the terms of that deal are being renegotiated. The trading subsidiaries of troubled California utility-holding companies PG&E Corp. (PCG) and Edison International (EIX) also are trading with Enron.
The third and largest group of companies are trading with Enron on a very limited basis to reduce exposure by taking off-setting trades against deals done long ago. These include El Paso Corp. (EPG), Reliant Resources (RRI), Tractebel SA's (B.TRB) U.S. trading unit and regulated utilities, the broker said.
Several energy traders said that both power and gas were being sold at prices lower than Enron was offering.
"They've been cut off from so many people," said one electricity trader.
Enron Says Just Slight Reduction In Transactions
An Enron spokesman said he has seen a slight reduction in transactions but not to 25% of the one-month-ago level.
The notional value of Enron's 30-day rolling average of transactions is $2.8 billion, said Enron spokesman Eric Thode. Thode declined to give volume data for Tuesday or Monday, although the company was giving daily information two weeks ago.
"We're not doing daily information. We're only speaking in terms of 30-day rolling averages. ... It's not fair to speak in terms of daily because of daily volatility," Thode said.
Traders and brokers said they hope Dynegy will offer some kind of guarantee to Enron's trading to restore confidence. But, after Enron's ability to transact took a severe turn for the worse Nov. 20, Dynegy said that the companies must continue to operate independently until their merger is approved and completed.
Energy companies began shying away from Enron over the past month, as concerns about its finances precipitated a 75% drop in its stock price and left its bonds trading at levels typically associated with junk-rated debt.
But Enron saw its ability to trade seriously damaged last week following the late release of its quarterly financial report with the U.S. Securities Exchange Commission. For the first time since Enron's troubles began a month ago, energy companies stopped selling to Enron in the spot markets for fear that Enron might not be able to pay its bills as soon as next month based on the quarterly filing.
Moody's Investors Service and Standard & Poor's all rate Enron one notch above speculative grade. Moody's has Enron's ratings on review for a downgrade, and S&P has Enron on negative credit watch. Fitch calls Enron's credit rating "evolving." Enron's ability to do business in the energy markets depends on its maintaining investment-grade ratings.
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com
(John Edmiston in Houston and Jon Kamp in Chicago also contributed to this article.)
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: UPDATE 3-Dynegy says in talks on Enron merger structure.
By C. Bryson Hull
11/27/2001
Reuters English News Service
(C) Reuters Limited 2001.
HOUSTON, Nov 27 (Reuters) - Energy trader Dynegy Inc. confirmed on Tuesday it was in talks with floundering rival Enron Corp. over their proposed merger, as sources familiar with the negotiations indicated the final buyout price may be slashed some 40 percent.
"I can confirm that we are in discussions with the parties involved in the transaction related to the deal," Dynegy spokesman John Sousa told Reuters. He declined to give further details.
Dynegy had planned to buy its Houston rival for $9 billion in stock and is currently in a "due diligence" examination of Enron's complex financial books that began before the Thanksgiving holiday last Thursday.
The buyout offer, finalized Nov. 9, would have had Dynegy paying about $10.41 for each share of Enron, but Enron's shares have since cratered to near $4, stoking investor fears the merger will not go through as planned - if at all.
The stock exchange ratio under discussion could fall from the originally proposed valuation of 0.2685 of each Dynegy share for each Enron share to around 0.15 instead, sources familiar with the matter told Reuters. Enron is willing to accept the lower valuation, given the pressure on its stock price, the sources said.
Enron's shares bounced on Dynegy's confirmation of the restructuring talks, trading up 22 cents at $4.23 in late afternoon action on the New York Stock Exchange. The shares had dipped as low as $3.84 in late-morning dealings and as high $4.49. Dynegy's shares gained 4.7 percent or $1.83 to move to $41.08 on the NYSE.
Also on the table were negotiations to extend maturation of Enron's debt past the close of the merger, expected in the third quarter of 2002. The sources said an announcement was possible on a new infusion of at least $500 million in cash, which Enron has said it was seeking.
There also seemed to be an accord over who gets first crack at the Northern Natural Gas Pipeline, which would be Dynegy's consolation prize if the deal fell apart, a source said. Published reports have said that investment banks J.P. Morgan and Salomon Smith Barney had already accepted the pipeline as collateral in other loans, and may dispute Dynegy's ownership if the deal breaks up.
"The pipeline is far more valuable than what has already been collateralized. There's a solid earnings stream from that thing," said one source familiar with the discussions.
ONE TRADING UNIT SHUT DOWN
Two sources confirmed to Reuters that Enron's equity trading unit has been told it is being closed and that the roughly 60 employees there are being laid off. Enron was not immediately available for comment.
Those layoffs, part of broader job cuts expected as part of the Dynegy buyout, point to an acute problem for Enron - the loss of volume in its premier trading franchise. Enron's trading partners have been cutting back transactions with North America's largest energy trader because of credit concerns.
"This business is hugely dependent on volumes and volume growth. It is the principal reason that Dynegy is making the deal. If it's worth a lot less then Enron is worth less. It's vital to stop the bleeding in its core trading and marketing business," said Commerzbank analyst Andre Meade.
But as Enron's stock continued to lose value, down over 50 percent since Dynegy's initial bid, it seemed likely the purchase price would fall as well. Enron has seen its market capitalization drop to around $3 billion, from $60 billion at the start of 2001. (additional reporting by Jeff Goldfarb, Janet McGurty and Jonathan Stempel in New York).
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
RPT Dynegy confirms in talks on structure of Enron merger deal
11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
(Repeating to clarify lead)
NEW YORK (AFX0 - Dynegy Inc confirmed it is in talks with Enron Corp on the terms of their two week-old acquisition deal.
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of a deal," Dynegy spokesman Steve Stengel said.
Enron declined to comment.
Citing people familiar with the matter, the Wall Street Journal reported today that Enron is in advanced talks with Dynegy to cut the price of the all-stock transaction by more than 40 pct to about 5 bln usd.
Enron is also trying to extend the maturity dates of some of its borrowings to stem a growing liquidity crisis, the Wall Street Journal said.
lwl/gc
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Merger Traders Wary Even If Enron, Dynegy Cut New Terms
By Christina Cheddar
Of DOW JONES NEWSWIRES
11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Even if Dynegy Inc. (DYN) revises the terms of its acquisition of Enron Corp. (ENE), some takeover traders say the stock remains too risky.
Earlier Tuesday, a Dynegy spokesman confirmed the company was in talks to restructure the Enron acquisition. Separately, a person familiar with the negotiations said the talks are centered on creating a package that includes a lower exchange ratio for Enron shareholders, a provision for additional funding for Enron, and the refinancing of Enron's existing debt.
Even with the boost Enron shares have received from the reports, they continue to trade at a sharp discount to the original deal's value. Enron shares recently traded at $4.30, up 29 cents, or 7.2%, while Dynegy shares changed hands at $41.50, up $2.25, or 5.8%.
Under the original terms of the deal, Enron shareholders will receive 0.2685 of a Dynegy for each share outstanding, or $9.47 billion. At current trading levels, Enron shares are at a 61% discount to the offer price.
According to The Wall Street Journal, Dynegy and Enron are contemplating an exchange ratio of less than 0.15 of a Dynegy share, or about $5.29 billion.
The rejiggered deal is an attempt to restore confidence in Enron's ability to carry on its core energy marketing and trading business as the deal moves toward completion, the person said.
As the market waits for more details from the two companies, some say it will take more than a revised offer to provide takeover traders, also known as arbitrageurs, with enough confidence to play the deal in the typical fashion.
Often arbitrageurs bet on pending mergers by selling short shares of the acquiring company and buying shares of the target. In this way, the traders hope to profit as the target's share price moves toward the buyer's offer.
But according to some traders, there is too much risk, even for those accustomed to uncertainty, to play the Dynegy-Enron deal in this way.
Several traders said they were still wary that the deal could collapse and potentially push Enron into bankruptcy.
Enron's fortunes took a sharp turn for the worst after investors began to realize the company liberally used accounting loopholes to move its debts into off-balance-sheet financing vehicles, including partnerships run by its former chief financial officer, Andrew Fastow.
"There's nothing like accounting to scare people," said one trader, who said there is still a perception in the market that there is more bad news yet to come from Enron.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Dynegy confirms in talks on structure of Enron merger deal
11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX0 - Dynegy Inc confirmed it is in talks with Enron Corp to renegotiate the terms of a deal with Dynegy Inc in an attempt to save their two week-old acquisition deal.
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of a deal," Dynegy spokesman Steve Stengel said.
Enron, meanwhile, declined to comment on the report.
Citing people familiar with the matter, the Wall Street Journal reported that Enron Corp is in advanced talks with Dynegy to cut the price of the all-stock transaction by more than 40 pct to about 5 bln usd.
Enron is also trying to extend the maturity dates of some of its borrowings to stem a growing liquidity crisis, the Wall Street Journal said.
lwl/gc
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
STOCKWATCH Enron slightly higher on hopes for new deal price
11/27/2001
AFX News
(c) 2001 by AFP-Extel News Ltd
NEW YORK (AFX) - Shares of Enron Corp were slightly higher in midsession trade on reports that the company is trying to renegotiate the terms of a deal with Dynegy Inc, by cutting the price of the all-stock transaction to 5 bln usd, or 40 pct, from 9 bln usd, dealers said.
At 12.19 pm, amid broad declines in the market, Enron shares were trading up 5 cents at 4.04 usd. Dynegy was up 1.26 usd, or 3.26 pct, at 40.51.
The DJIA was down 111.48 points at 9,871.28. The S&P 500 was down 10.40 points at 1,147.02. The Nasdaq composite was down 20.25 points at 1,920.98.
Earlier, the Wall Street Journal said Enron was in advanced talks with Dynegy in an attempt to salvage their two week-old acquisition deal. The companies are discussing a new price for the all-paper deal, following the sharp fall in Enron's share price of the past few weeks.
Enron had hoped to finalise the deal and make an announcement yesterday that would calm investors -- the shares are trading at a small fraction of their record high last year of 87.50 usd.
As of today, however, the revised deal still has not been formalised.
The current agreement with Dynegy contains a "material adverse change" clause, which could be invoked to call the deal off.
As part of its due diligence, Dynegy is examining details of Enron's filing with the Securities and Exchange Commission last week, which reportedly contained information it had not received previously.
"Enron is a black hole, and I don't know how deep the bottom is," said Fadel Gheit an analyst at Fahnestock & Co.
Only four weeks ago, Enron's stock was trading at the 8 usd mark, Gheit said, noting that if the Dynegy had done their homework the stock would not have continued to collapse.
"The market sees this and somebody has to figure out the potential exposure, it could be several billion dollars," said Gheit.
If the deal is to go through then the two companies must arrive at a new stock-exchange ratio, said Gheit. Under the current acquisition agreement, Dynegy would exchange 0.2685 share for each Enron share tendered.
According to the Wall Street Journal, the new ratio is expected to be less than 0.15 share of Dynegy stock for every share of Enron stock, which would value Enron at less than 6 usd a share, or about 5 bln usd.
blms/cl/gc
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
IN THE MONEY: Hedge Funds Say Yes To New Enron Terms
By Carol S. Remond
11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
A Dow Jones Newswires Column
NEW YORK -(Dow Jones)- News that Enron Corp. (ENE) and would-be suitor and savior Dynegy Inc. (DYN) are working to renegotiate their merger agreement has done little to assuage market jitters about Enron's fate.
And so far, even professional arbitrageurs, who normally thrive on placing bets on whether a merger is going to go through, continue for the most part to stay clear of Enron's stock and bonds because of the uncertainty surrounding the once mighty energy trader.
Still, reports that the equity swap ratio offered by Dynegy could be revised down to below 0.15 from 0.2685, has some hedge funds, often willing to take more risks, looking to place trades on the deal.
"We're trying to figure out a good play," said a trader at a New York hedge fund.
So far, bets under consideration seem to be those that would include a combination of stock and debt trading, somehow hedging a short position on Enron's shares with a long position in some of its bonds.
"People that are playing the debt are definitely playing the stock against it," a hedge fund manager at another fund said. This manager added, "We're still trying to evaluate different risk/reward scenario on the debt and equity sides."
Investors that sell stock short borrow shares in the hopes of replacing them later by purchasing them at a lower price.
Arbitrageurs typically sell short shares of the acquirer, while taking long positions in the stock of the target company. But there is nothing typical about Enron's financial woes and the rescue efforts launched by Dynegy and large banks like J.P. Morgan Chase & Co. and Citigroup Inc.
Traders reported increased activity in the still mostly illiquid Enron debt market. "Some bids are coming in, especially on the lower priced bonds," said a trader at a large New York investment bank that makes a market in Enron's bonds.
Enron bonds, which had fallen in value in recent weeks, gained five to seven points early Tuesday as investors continue to await confirmation from Enron and Dynegy that their merger deal remains on track, albeit at a lower price. Enron's 6.4% bonds due 2004 were recently trading at about 55 cents on the dollar, up from 48 cents Monday.
Under the original terms of the deal, Enron holders would have gotten 0.2685 of Dynegy shares for each of their Enron shares. Quoting people close to the discussions, The Wall Street Journal reported Tuesday that the new ratio is expected to be less than 0.15 share of Dynegy stock for every share of Enron stock. That lower exchange was also mentioned in a Dow Jones Newswires story last Friday. At current prices a 0.15 exchange ratio would value Enron at less than $6 a share.
Essentially this new value, if true, means that it has now become easier for hedge funds and other risk takers to play the merger odds.
When a hedge fund shorting Enron stock at $4 a share risked losing more than $6 if the merger went through at the 0.2685 ratio, it now stands to lose only $2 a share (based on the $6 value of Enron stock under the new 0.15 ratio). At the same time it has become much easier to hedge that loss potential by going long on Enron bonds. If the merger doesn't happen, Enron is seen by many as heading for bankruptcy with an ultimate share value of 0. That means that hedge funds shorting Enron at $4 stand to benefit by that amount.
Hedge fund managers and traders said that current thinking puts the value of Enron bonds at about 20 cents on the dollar if the merger fails and about 80 cents on the dollar if it goes through. Meanwhile, the value of Enron stock is capped at about $6 a share if the merger goes through with a new conversion ratio of 0.15.
"A lot of the guys are still very skeptical," said a bond trader at a New York bank. "But this is really making the hedge trade easier and we've seen more customers short the stock and buy the bonds."
Still, this type of bets isn't for the faint of heart, and most investors are likely to wait for more news before taking a position.
"We're nibbling a little bit at the bonds right now. But the situation is so volatile that it's difficult to be aggressive," the manager of a large New York hedge fund said.
Carol S. Remond; 201-938-2074; Dow Jones Newswires
carol.remond@dowjones.com
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Dynegy Confirms Talks On Enron Deal Structure - Source
By Christina Cheddar
Of DOW JONES NEWSWIRES
11/27/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)
NEW YORK -(Dow Jones)- Dynegy Inc. (DYN) confirmed the company is in talks with a number of parties regarding the structure of its transaction with Enron Corp. (ENE).
"I can confirm that we are in discussions with the parties involved in the transaction related to the structure of the deal," said John Sousa. "I can't elaborate any further at this time."
An Enron official wasn't immediately to comment.
Earlier Tuesday, a report in The Wall Street Journal quoted people familiar with the matter who said Enron and Dynegy were in advanced discussions to cut the price of the all-stock transaction by more than 40% to about $5 billion. Sousa, the Dynegy spokesman, didn't comment on the newspaper report.
Dynegy shares recently traded at $40, up 75 cents, or 1.9%, while Enron shares changed hands at $3.94, down 7 cents, or 1.7%.
Under the original terms of the transaction, Enron shareholders are to receive 0.2685 of a Dynegy share, or $10.78, for each share outstanding, or about $9.14 billion, based on Dynegy's recent stock price.
According to the Journal report, the new terms could be below 0.15 of a Dynegy share.
The deal is critical for Enron, which also simultaneously carrying out talks to receive between $500 million to $1 billion in additional funding to support its operations, while carrying on negotiations to restructure its debt, which totals about $13 billion.
While Dynegy has already provided Enron with a cash infusion, it is uncertain how long Enron's current funds will allow it to remain solvent.
Meanwhile, a third employee lawsuit has been filed against Enron over lost 401(k) retirement savings due to the recent collapse of Enron's stock, which has declined more than 90% in the trailing 12 months. The suit claims Enron "locked down" the plan, which prevented employees from being able to sell the shares, and seeks $850 million for plan losses.
Although the other recently filed employee suits didn't disclose the amount of compensation the plaintiffs are seeking, it is possible the suits seek a similar level of damages, a CreditSights report said.
If this is true, the CreditSights report said, it is possible the clause that allows Dynegy to walk away from the deal if the liabilities from "pending"' or "threatened" litigation may exceed $3.5 billion may be invoked.
In addition, to the employee lawsuits, more than a dozen shareholder suits have been filed against Enron.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com
The discussions between Enron and Dynegy aren't merely focused on revising the consideration Dynegy will pay. They are also aimed at providing Enron with additional funding and at restructuring its debt, said a person familiar with the negotiations.
The moves are aimed at restoring confidence in Enron and relieving "the perceived liquidity crisis," the source said.
-By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
USA: Enron shares down despite talk of new Dynegy deal.
11/27/2001
Reuters English News Service
(C) Reuters Limited 2001.
NEW YORK, Nov 27 (Reuters) - Shares of financially troubled energy trading giant Enron Corp. slipped back into the red on Tuesday after gaining in opening trade following news of a new rescue deal from Dynegy Inc. .
Enron shares were down 2 cents at $3.99 after rising 19 cents, or 4.7 percent, to $4.20 in early dealings on the New York Stock Exchange.
Analysts questioned the viability of the original proposal for Dynegy to acquire Enron in a deal worth about $9 billion.
The Wall Street Journal reported that the companies were discussing reducing the price of the all-stock deal by more than 40 percent, to about $5 billion.
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Enron Credit Rating to Remain Unchanged for Today, Moody's Says
2001-11-27 16:12 (New York)
Enron Credit Rating to Remain Unchanged for Today, Moody's Says
New York, Nov. 27 (Bloomberg) -- Enron Corp.'s credit rating
will remain at ``Baa3,'' the lowest investment grade, by Moody's
Investors Service, which said it won't take any ratings action
today on the largest energy trading company.
David Stimpson, Moody's managing director for ratings
communication, said although there was speculation in the market
that Moody's would make a ratings change, the company won't take
any action on Enron today. Stimpson declined further comment.
Moody's had been expected to make a statement on Enron's
credit as bankers sought to raise as much as $2 billion for the
energy trader in private equity.
Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B.
Lee have been unable for two weeks to raise the money because of
concern Enron won't be able to meet its obligations. That concern
was heightened after Enron disclosed a $690 million payment due
this week. Enron needs the money to operate as it completes an
acquisition by Dynegy Inc.
Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle
2001-11-27 15:16 (New York)
Enron Turned Down by Investors Alwaleed, Blackstone, Carlyle
New York, Nov. 27 (Bloomberg) -- Enron Corp.'s bankers,
seeking to raise as much as $2 billion for the energy trader, have
been turned down by investors including Prince Alwaleed Bin Talal,
the Carlyle Group Inc. and Blackstone Group LP.
``I was approached by several people to invest in the
company, but we declined,'' said Alwaleed, a billionaire investor
from Saudi Arabia. The fall in Enron's shares, which have declined
95 percent this year, didn't necessarily make it a good
investment, he said.
Bankers led by J.P. Morgan Chase & Co. Vice Chairman James B.
Lee have been unable for two weeks to raise the money because of
concern Enron won't be able to meet its obligations. That concern
was heightened after Enron disclosed a $690 million payment due
this week. Enron needs the money to operate as it completes an
acquisition by Dynegy Inc.
The prospect that Enron will fail to line up financing,
jeopardizing its plan to be acquired by Dynegy, has weighed on its
stock and bonds. The company's securities gained today as talks
between Enron and Dynegy to renegotiate terms of the transaction
convinced some investors the takeover was more likely to take
place.
Enron 6.4 percent bonds that mature in 2006, which closed
yesterday at 48 cents on the dollar, rebounded to trade at about
55 cents on the dollar. At that price, the bonds yield 22.5
percent. Enron shares rose 21 cents, or 5 percent, to $4.22. The
stock finished yesterday at $4.01, its lowest level in 14 years.
Declining to Invest
J.P. Morgan and Citigroup Inc., Enron's largest lenders, plan
to provide $250 million to Enron each as part of a $2 billion
package. The bankers have been seeking additional investments,
which would be made in the form of convertible stock, for more
than two weeks.
Questor Management Co., a $1 billion private-equity fund that
invests in troubled companies, and buyout funds such as Carlyle
Group and Blackstone have balked at investing, said people
familiar with the situation. Blackstone and Questor declined to
comment. Christopher Ullman, a spokesman for Carlyle, said: ``We
are not in discussions with Enron about financing.''
``More equity would leave Enron with a stronger balance sheet,
which should reassure their trading partners,'' said Kathleen
Vuchetich, who helps manage $1.4 billion in assets at the Strong
American Utilities Fund. Vuchetich has 4.2 percent of her
portfolio invested in Dynegy shares.
Enron and Dynegy discussed revising the terms of their merger
over the weekend, said Steve Stengel, spokesman for Dynegy. Dynegy
is now talking about paying less than 0.15 share for each of
Enron's, valuing the company's equity at about $5 billion, or less
than $6 per share, the Wall Street Journal reported, citing people
close to the discussions.
Terms
``The concern is that the Dynegy deal breaks down,'' said
Paul Tice, co-head of U.S. high-grade credit research who covers
the energy market for Deutsche Bank.
Current terms call for an exchange ratio of 0.2685 share of
Dynegy stock for each Enron share. Given recent disclosures about
Enron's debt and the drop in the stock price, a fairer ratio would
be 0.15 share of Dynegy, said Ronald Barone, a UBS Warburg analyst
who rates Dynegy a ``strong buy.''
Under current terms, the deal makes sense for Dynegy only if
Enron earns 85 cents or more next year, said Gordon Howald, an
analyst at Credit Lyonnais who rates Dynegy a ``buy.'' UBS
Warburg's Barone has reduced his estimate of Enron's 2002 earnings
to 75 cents a share from $1.65.
Enron needs an infusion in part because it has $9 billion of
payments due before the end of 2002 and less than $2 billion in
cash and credit lines. The decline in reserves has also raised the
prospect that Moody's Investors Service may cut Enron's credit
rating. A lower rating would trigger $3.9 billion in debt
repayments for two affiliated partnerships.
Cash Question
``The main question is: `What is the cash position right
now?''' said Tice at Deutsche Bank. ``Is the falloff in the cash
position of the company stabilizing or not?''
Moody's hasn't issued a report on Enron since the company
filed a quarterly report with the Securities and Exchange
Commission last week announcing it had a $690 million note due
this week. On Wednesday, Enron got a three-week reprieve from
lenders on the $690 million note and closed on a $450 million
credit line. Dynegy Chief Executive Officer Chuck Watson said he
was ``encouraged'' by the developments.
Liberty Funds Analyst Paik Comments on Dynegy and Enron Talks
2001-11-27 11:56 (New York)
Boston, Nov. 27 (Bloomberg) -- Edward Paik, an analyst at
Liberty Funds Group, comments on Dynegy Inc.'s proposed
$23 billion acquisition of Enron Corp., the largest energy trader.
Paik has Enron shares among the $3.6 billion in assets he
helps manage at Liberty.
Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday.
``The stock market is clearly 100 percent certain the Dynegy
deal won't go through as negotiated,'' Paik said. ``We're just
waiting.''
``If they announce they've renegotiated the deal, it will be
implicit that due diligence has been done, and that Dynegy won't
walk away for anything that's happened up until now. If they were
to impose more conditions, what good is that? Dynegy needs to
resuscitate Enron back to health.''
A.G. Edwards Analyst Heim Comments on Dynegy and Enron Talks
2001-11-27 11:00 (New York)
St. Louis, Missouri, Nov. 27 (Bloomberg) -- A.G. Edwards &
Sons Inc. analyst Michael Heim comments on Dynegy Inc.'s proposed
$23 billion buyout of Enron Corp., the largest energy trader.
Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday. Heim rates Enron ``sell'' and Dynegy ``hold'' and
doesn't own shares of either company.
The market is waiting for confirmation and details of a
renegotiated bid, Heim said.
``We'd need to know why they'd agreed to a new price,'' Heim
said. ``It also needs to be combined with some sort of shoring up
of Enron's trading business, which needs to be stabilized for the
deal to have real value.''
Commerzbank Analyst Meade Comments on Dynegy's Talks With Enron
2001-11-27 10:42 (New York)
New York, Nov. 27 (Bloomberg) -- Commerzbank Securities
analyst Andre Meade comments on Dynegy Inc.'s proposed
$23 billion buyout of Enron Corp., the largest energy trader.
Dynegy may renegotiate terms of its bid for Enron, people
familiar with talks between the Houston-based companies said
yesterday. Meade rates both companies ``hold'' and owns no shares.
``If they are renegotiating, it confirms our fears that
Enron's crown jewel, its marketing and trading business, is
deteriorating,''
Investors are waiting for a sign on the state of the
business, Meade said.
Enron's trading business was worth more than $10 billion
before partners began shunning it on credit concerns, Meade said.
A lower price struck by Dynegy may reveal how much business has
fallen, and whether Dynegy believes Enron can regain it, Meade
said.
A New York Times report that banks may extend payments on
some loans until after Dynegy purchases Enron ``raises concern
that Dynegy will be hurt by taking on the vast liabilities of
Enron,'' Meade said.
ENRON SHARES RECOVER FROM A.M. SLUMP
By Lisa Sanders
CBS.MarketWatch.com
4:10 PM ET Nov 27, 2001
HOUSTON (CBS.MW) -- Shares of Enron recovered from the morning's sub-$4
a share level Tuesday amid reports that the embattled energy merchant is
working with Dynegy to renegotiate its takeover offer.
Enron (ENE), which once hit $84.88 during the last holiday season,
added 13 cents to close at $4.14 on volume of 68.4 million shares. The
stock was the most actively traded on the New York Stock Exchange
Tuesday.
Dynegy shares added $1.64 to close at $40.89.
The New York Times reported that Houston-based Dynegy (DYN) and Enron
are renegotiating Dynegy's bid, once valued at $9 billion in stock.
According to the report, Dynegy is worried that Enron's core business --
energy trading -- is deteriorating. See full story.
Getting it done
_______________________________________________________________________
Glen Hilton, portfolio manager of the Montgomery New Power Fund, said
it's a "crapshoot" as to whether the deal gets done.
"I think that regardless of the outcome Dynegy is still in a good
position for the long-term," he said. His fund liquidated its Enron
holdings completely in mid to late-October. "Enron was the leader (in
energy trading), and it's clearly suffering so Dynegy is in a good shot
to take up the mantle."
Hilton pointed to Enron's 10-Q, filed last Monday with the Securities
and Exchange Commission, and the falling share price as potential
triggers of the deal's material adverse affect clause. Those two things
could very well make Dynegy walk away from the merger. If that happens,
Hilton said, an Enron bankruptcy is a very real possibility.
"Very few companies understand what Enron does and Dynegy is one of the
few that could make something out of it," Hilton said. "If Dynegy can
restore confidence in Enron's trading business and get Northern Natural
Gas, it looks like it might be worth the headache."
Dynegy has the rights to Enron's Northern Natural Gas, a pipeline
system, whether the merger goes through or not.
Enron wasn't immediately available for comment. Dynegy, through a
company spokesman, confirmed that it was in discussions with "the
parties involved in the transaction" related to the structure of the
deal.
Top Of The News
Enron In Free Fall
Dan Ackman
, Forbes.com
, 11.27.01, 9:00 AM ET
NEW YORK - If not for Sept. 11, Enron would be a major scandal; as it stands, it's a minor scandal. The Houston-based energy company, whose Chairman Kenneth Lay is a personal friend of and top fundraiser for President George W. Bush
and Vice President Dick Cheney, is in free fall. The bailout by rival Dynegy made public three weeks ago appears to be unraveling.
Dynegy's (nyse: DYN
- news
- people
) buyout of Enron (nyse: ENE
- news
- people
) was originally valued at $9 billion. But just as the deal was announced, Enron said its prior financial reporting was inaccurate and that it had overstated earnings by $586 million over the past four years.
While the companies have not said the merger is off, investors don't believe it will happen, at least not at the stated price; they have bid Enron shares down to the point where the company has a market value of less than $3 billion. The shares closed yesterday at $4.01, down from $78 a year ago.
The situation is in flux, as it has been for months. During that time, several top Enron executives have been forced to resign. Jeffrey Skilling, Enron's former chief executive officer, left in August for "personal reasons."
Company officials said they hope to announce, perhaps as early as today, a series of changes: a lower price for the takeover; a cash infusion of $500 million; new, extended loan terms by Enron's bankers; and somehow, an agreement that prevents Dynegy from walking away in the face of litigation over Enron's devastated employee-retirement plan. Lawsuits by shareholders are sure to follow, considering Enron's restatement and the pay it lavished on executives, including Lay who received $135 million from salary, bonus and the exercise of stock options in 2000 alone.
For now, Dynegy says it still wants to do a deal for its crosstown rival with 2000 revenue of $101 billion.
Even more alarming than the deterioration in the share price is the crisis of confidence in Enron's reliability as a trading partner in worldwide energy markets. Last year, Enron was the dominant player in natural gas and electricity trading--a fast-paced, complex business quite removed from the company's history as a gas- and oil-pipeline builder and operator. The fear now is that other companies will refuse to trade with Enron out of trepidation that it will file for bankruptcy and not pay its bills.
The company had $10.5 billion in debt as of its last annual report, and that number has likely grown by 20%. Already, credit agencies have cut their ratings on Enron debt.
Dynegy and its partner, ChevronTexaco (nyse: CVX
- news
- people
), may pump billions of dollars into Enron's operations if the purchase goes through. But the deal will certainly undergo regulatory scrutiny and will take months to close. Investors and energy traders are increasingly doubtful that Enron can hang on by itself.
Enron bills itself as one of the world's leading energy, commodities and services companies. It says it "markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world." While all this may be true, its popularity with investors was based largely on its fast-growing revenue--much like the Internet companies whose collapse it mirrors.
Few shareholders had any understanding of what Enron did to generate that revenue, and indeed Enron's own auditors at Arthur Andersen were confused. Most of the revenue was generated from trading, but the company's shares sold as if it was still an industrial company and not a financial firm.
Enron was famous for being famous. Before the start of the 2000 baseball season, it purchased the rights to have its name on Houston's new ballpark. By 2002, Enron Field may need a new name.
The name Enron itself sounds like it has something to do with energy, but it means nothing. At the time the company was formed from the merger of InterNorth of Omaha and Houston Natural Gas, the idea was to call the company Enteron. But the namers then looked in the dictionary and found out that Enteron means "intestines;" they decided to drop the "te" in the middle and go with Enron. Soon Enron may be part of Dynegy, a much smaller company in terms of revenue. If the deal falls apart, it may want to go back to Enteron.


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