|
|
Enron Mail |
Bruce: I'm out of the office tomorrow but will be back Monday. Let's talk
then please. Sara To: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, arcohen@skadden.com, jschaub@skadden.com Subject: Re: Millennium - UPDATE Here is the update: 1. BONY is getting a legal opinion on the ADR issuance and is in contact with Millenium's attorneys. 2. DKB has performed investigations on whether these ADRs must be restricted, DKB's view is that they should not restricted. This is highly arcane US SEC law (so my summary is probably missing a lot of finer points), but my understanding is that DKB views the sale of the local shares as a real sale, with a public notice, a public underwritten auction etc,and there is nothing restricted about the shares. I don't think BONY would dispute that, but I think their interpretation (and our legal view) is that the shares are restricted because they are shares that were not registered with the SEC under the original ADR issuance and, critically, they were sold by the "Issuer". That is, BONY's view is that BNDES is the same as Millenium b/c they are both government entities--ie BNDES is the "Issuer". Therefore, regardless of the public nature of sale of the shares (and the fact that the shares aren't restricted for trading locally in Brazil), the shares issued as ADRs would be restricted per US law. Now, ultimately we have to go with what BONY says b/c they issue the ADRs. However, before we charge back to BONY and argue DKB's case, I would appreciate a review by Skadden back to me on whether these shares if issued as ADRs would be restricted. We want unrestricted, NYSE ADRs if possible. 3. When the ADRs are issued, they will be issued to PEP, a Brazil company, but deposited in one of the CayCo parents of PEP custody account. We will need to check Brazil law and revise our MS custody account accordingly to se eif we can do this. Sara, again I will try to call tomorrow, I apologize for the delay. 4. The plan to move the ADRs out of Brazil is as follows. There will be no sale and no cash movement. There may be a CPMF. PEP will perform an "in-kind" capital reduction of the shares back to its CayCo parent. This will probably require some Brazil government approvals (or may not). If so, what are they and how long will they take? 5. Critically, we have been advised by Brazil legal and by US tax that the shares if moved in this manner will move at the ORIGINAL COST BASIS. IE, there is no taxbale event for US or Brazil. Lynn, please confirm. 6. I don't have a timetable yet, I will call BONY tomorrow for an update on timing. Regards, Bruce Lynn Aven 12/07/99 07:14 AM To: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: Millennium - ROBERT The PEP Cayco parent is the appropriate entity to serve as custodian for the ADR certificates. PEP actually has two Cayman shareholders. All the of the certificates can be issued to the 99% shareholder. I will address via a separate message how the accounting entries need to be booked in order to reflect the fact that the 1% shareholders received shares in the capital reduction. Lynn Enron International Structuring Group From: Bruce Harris 12/06/99 05:59 PM To: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: Millennium - ROBERT I spoke w/Theresa at BONY aand we have agreed on a fee of 1.5 cents per ADR. That works out to a fee of $231,654.00 on 15,443,600 expected ADRs. Kent, who will handle the invoice from your group? I emphasized that "time is of the essence". Robert, please call me tomorrow and we can get Gareth involved to help us with all the issues. Sara, I will also call you tomorrow to give you background. 1. We will need to get in touch with our Brazil broker, who I assume is DKB (Pedro, who and at what phone number?). 2. The broker will move our local shares to Banco Itau, the custodian bank. 3. BONY will issue ADR certificates to a custodian/location that we determine offshore (I think we would use PEP-Cayco parent, Lynn please confirm company). 4. I think we will use MS as custodian (assuming account contemplates holding physical, restricted securities--Sara, I will speak with you about this). 5. Theresa has calls in to Millenium to get "ok" and also is working to get legal opinion issued on issuing restricted ADRs pursuant to original ADR documentation (if I udnerstand the issue correctly). 6. Once the shares are transferred, we will seek to do an "in-kind" capital reduction at the PEP level up to its CayCo parent and hopefully avoid any CPMF. Also, we should be able to use original basis for both Brazil and US tax and thus no tax impact, at leats this has been indicated to us. Regards, Bruce Enron International Structuring Group From: Bruce Harris 12/03/99 07:29 AM To: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: Millennium - daily Yes, BONY is getting back to me today with the cost to create the ADRs. From tax standpoint, Lynn has determined that if we move the shares via a capital reduction, there will be no Brazil or US tax (other than perhaps a CPMF) since we will move the shares at their original basis. So the price doesn't matter too much--but I don't want to take any chances with the Brazil tax authorities. Better to move the shares now when the price is pretty even than to move it later when the price has doubled; it would be a tempting tax target. Regards, Bruce Pedro Henrique Oliveira 12/03/99 07:02 AM To: Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: Millennium - daily Bruce is working with Robert and Lynn trying to create "special" ADR that will not be listed. Alternatively, specially if we are going to prepay Eletrobr?s' debt, we can always trade some portions of the shares, on the stock exchange between Ernon companies. This method would take us some time to do all our position, but the advantage is we would be creating listed ADRs. Pedro Kent Castleman 12/03/99 08:58 AM To: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Millennium - daily the sotck continues to run up - what happened to the project to move the shares offshore? Kent ---------------------- Forwarded by Kent Castleman/ENRON_DEVELOPMENT on 12/03/99 08:45 AM --------------------------- Roberto Schloesser 12/02/99 08:13 PM To: James M Bannantine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Diomedes Christodoulou/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Ricky Lynn Waddell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Connie F Estrems/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Millennium - daily
|