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---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/05/2000 12:30 PM --------------------------- From: Mike McConnell 10/03/2000 08:24 AM To: Jeffrey A Shankman/HOU/ECT@ECT cc: Subject: Garcia Munte / Spain FYI ---------------------- Forwarded by Mike McConnell/HOU/ECT on 10/03/2000 08:24 AM --------------------------- John Sherriff 10/03/2000 12:38 AM To: Steve W Young/LON/ECT@ECT cc: Mike McConnell/HOU/ECT@ECT, Michael R Brown/LON/ECT@ECT Subject: Garcia Munte / Spain Steve - Can you please give Michael Brown, Mike McConnell and me an update on this. John ---------------------- Forwarded by John Sherriff/LON/ECT on 03/10/2000 06:40 --------------------------- Michel Decnop 02/10/2000 19:05 To: John L Nowlan/HOU/ECT@ECT, David Hardy/LON/ECT@ECT, Tani Nath/LON/ECT@ECT, Ross Koller/LON/ECT@ECT, Anastasia Karabatsos/LON/ECT@ECT cc: Chris Mahoney/LON/ECT@ECT, Steve W Young/LON/ECT@ECT, John Sherriff/LON/ECT@ECT, William S Bradford/HOU/ECT@ECT, Tim Davies/LON/ECT@ECT Subject: Garcia Munte / Spain The situation of this file, which was on the last leg , is suddenly worsening. (cargo payment exposure decreasing as follows : 19 million oct 3rd / 14.5 million oct 15th / 5 million oct 30th, zeroing in november as we have stopped deliveries to GM - We continue only to supply KPC and Conti cargoes direct to the third parties) . Main cause is the fuel crisis in Europe, particularly in Spain, where combination of prices kept low under government pressure, and blockade of terminals by strikers, have cut the cash flow of GM, putting into peril the above plan; and this is worsened by the attitude of the owner, who seems to be unable to face the situation. He is now stopping his management effort to sell the company, which was the only viable solution; the company being unable financially to sustain the burden of carrying the strategic inventories, a direct consequence of the increase of the trading volume in the early 2000. As a reminder, we have 20 million USD of strategic inventories in the name (and paper control) of ECTRIC Spain. We need however to urgently get 3 more documents to have paper title/possession of these, with always the risk that a Spanish liquidator contest our position. We could initiate the sale of these inventories, however as they are used by GM in their strategic inventory figure, we immediately make GM unable to continue their operations, as they will loose their operating licence and stop payments... GM general manager was here today, he was asking if Enron could step in and save the company ; however, it doesnot seem to be possible without increasing our exposure, which we have no appetite for.. We are going to meet asap GM President to put all possible pressure on him to accept to sell the company to a third party (Tamoil/BP are potential buyers), and sign the few documents missing, giving us full control of ECTRIC Spain. We will then monitor situation on a daily basis; fear that we will be in a difficult corner if Spanish conflict is not ending, and if company cannot get sold. Thanks Michel
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