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Enron Mail |
Eric,
Below is an e-mail from one of our contacts at Harvard Management Company (HMC). They manage the Harvard University endowment and Jason works in their commodities group. We are talking to him about the possibility of buying equity in the KCS deal. Specifically, they will buy Trust certificates that CIBC currently owns. The reason why this is important is that CIBC negotiated certain equity rights which effectively gives them veto rights over debt. CIBC is unwilling to give up their rights, so we are looking into the possibility of having HMC buy them out. HMC will not insist on having these rights. With this background in mind, I need your help to answer some of the following question with regards to KCS. Can you or Charlie go through the following questions and we can discuss them afterwards. I know the answer to some of the questions, but not all. Thanks and best regards, Rafi -----Original Message----- From: Hotra, Jason [mailto:hotraj@hmc.harvard.edu] Sent: Thursday, July 19, 2001 7:05 AM To: Saubier, Sebastien; Jones, Doug; Khan, Rafi Subject: RE: Information Thanks... I haven't spoken to stu yet, but a couple questions: is there a floating price offtaker lined up for the gas? does production occur daily over the course of the month? how would physical sales be priced, considering the fact that the basis is already secured? The offtaker must either pay NYMEX prices for the gas, or else the packaged basis swap must settle on the same terms that the offtaker calculates the prevailing basis... would the offtaker pay bidweek prices or daily nymex settles...? What is the "excess cash allocated to equity"? some sort of fixed payment? when is that made? the "total" line would imply that the "excess cash" is paid immediately, or else that the value is already a PV number, since it is not being discounted... what is the certainty of that payment? Based on current NYM pricing, I get the NPV of unhedged volumes worth about 3.4m, making the total including excess cash payment 5.45m... What is the upfront equity required? -----Original Message----- From: Saubier, Sebastien [mailto:Sebastien.Saubier@enron.com] Sent: Wednesday, July 18, 2001 8:48 PM To: hotraj@hmc.harvard.edu; Jones, Doug Cc: Khan, Rafi Subject: Information Jason, Rafi asked me to send you the attached information regarding the proposed project he and Doug discussed with you this afternoon. It is a template that calculates the value of the equity based on a NYMEX strip. Please input the NYMEX values in the indicated column to obtain the equity valuation as of 7/31/01. Please call if you have any questions. Regards, Sebastien 713 345 4387 Rafi 713 345 4004 Doug 713 853 7494 <<KCS-Harvard71801.xls<<
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