QUESTION: Send to your favorite counterparty. Enron Receives Dynegy $1.5B Cash Infusion Tues. >DYN ENE By Christina Cheddar 11/14/2001 Dow Jones News Service (Copyright (c) 2001, Dow Jones & Company, Inc.) NEW YORK -(Dow Jones)- Dynegy Inc. (DYN) provided Enron Corp. (ENE) Tuesday with the $1.5 billion cash infusion envisioned in the companies' merger agreement, a Dynegy spokeswoman said. Dynegy received preferred stock and other rights in an Enron unit that owns the Northern Natural Gas pipeline in return for its investment. The cash infusion, which was made with the assistance of Dynegy's largest shareholder, ChevronTexaco Corp. (CVX), is aimed at providing Enron with additional cash liquidity to support its core energy marketing and trading operations. The rights provide Dynegy with the option to acquire the pipeline unit should the two companies fail to complete their merger. The deal, which still needs shareholder and regulatory approval, is expected to close within the next six to nine months. Dynegy is acquiring Enron for 0.2685 of a Dynegy share, or about $10 billion based on the recent price of Dynegy shares. The acquisition of Enron by its smaller rival follows a series of disclosures about Enron's financial dealings with partnerships run by some of its corporate officers. The dealings are under investigation by the Securities and Exchange Commission and at the center of more than a dozen of shareholder lawsuits. During the last month, Enron watched as its share price sunk to a small fraction of its earlier levels as shareholder confidence in the trading company evaporated. As credit-rating agencies began to cut Enron's debt ratings threatening the company's investment-grade status, the company scrambled to raise additional cash to shore up its balance sheet and protect confidence in its business. Industry experts viewed Dynegy's cash infusion as one way the companies sought to bolster confidence in the energy trader's liquidity, and protect its most valuable business. In a conference call earlier Wednesday, Enron said its core energy trading business has been temporarily hurt by the uncertainty created by recent events. According to Dynegy spokeswoman Jennifer Rosser, the preferred stock Dynegy has received for its investment in Enron is convertible into the common stock of the Enron pipeline unit. Dynegy also has the right to convert the preferred stock into Enron shares if it desires, the spokeswoman said. For example, if Enron were to cancel its merger with Dynegy in order to accept a higher bid from another suitor, Dynegy might decide to convert its preferred shares into Enron stock in order to reap the profits created by an increase in Enron's stock price, Rosser said. In either case, Dynegy wouldn't be required to pay any additional consideration. Dynegy was able to make the cash infusion after ChevronTexaco, of San Francisco, made an investment in Dynegy. If the acquisition closes as anticipated, ChevronTexaco, which owns about one-fourth of Dynegy, plans to make an additional $1 billion investment in the combined company. ChevronTexaco also has the right to purchase an additional $1.5 billion in Dynegy stock in the first three years following the close of the acquisition. Enron officials said they are monitoring the energy market's reaction to the cash infusion, and hopes it will restore the confidence of its counterparties. Enron remains on a credit watch at the credit-rating agencies. Moody's Investors Service and Standard & Poor's each have Enron rated one notch above speculative grade.
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ANS: Enron Receives Dynegy $1.5B Cash Infusion Tues. >DYN ENE
I talked to Lavila Lawrence with Duke Energy Field Services, LP. and she advised me that the GPM Dumas Plant (POI 18058) is going to be shutdown effective January 1, 2002. They will diverting some of the gas to other pipelines and any gas that will be coming to NNG will come through interconnects that David Moon takes care of in the Texas Panhandle. She said "They wouldn't have to de-rhime that plant anymore! ", which gave me the impression that the cost of maintenance might be the reason for the shutdown. Any questions, please call. Randy Janzen
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answer: GPM Dumas Plant Information
Your new offices will be ready in a week or so. We anticipate your moves will take place over the weekend of September 29. Joy Davis will coordinate your moves and can help with obtaining boxes, etc.
Answer: Office Moves
Here is an email: Sally - I have talked with Jeff Gossett and Bob Superty regarding possible promotions in their groups, but have not talked to any other group leaders. Please let me know if you would like to be the contact for any of the groups or if you would like me to get that information from group Directors. You can reach me on my cell at 713-503-7912 and I will be working late tonight. Thanks for your help - Tana
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A: Promotion Request
Q: Joe: I need your help regarding the above counterparties As you probably know, at the holding company level, BT and Deutsche merged so that now bankers Trust is a subsidiary of Deutsche Bank AG. ENA has a Master with BT and we are negotiating one with Deutsche. Their attorney informed me today that it was his understanding that all new trades should be confirmed with Deutsche Bank. Here is what I need to know: 1. The date of the last trade that we confirmed with BT. 2. The date of the first trade that we have confirmed with Deutsche. 3. A copy of the Deutsche confirm that we are being sent. Thanks for your help.
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A: Deutsche Bank and Bankers Trust
Here is an email: Over the past few months, Enron Global Finance has been evaluating various opportunities where Enron and Smith Graham & Company may be able to work together. Unfortunately, the process was slowed when our primary contact at Smith Graham, Gabriel Hayes, left the firm earlier this year. We have since reestablished discussions and the Global Finance Group is preparing a proposal that a portion (about $30 million) of the Enron Cash Balance Plan portfolio be dedicated to an emerging managers portfolio. One-third of this money ($10 million) would be invested in bonds, which could be placed with Smith Graham, as the fixed-income manager . (Total Plan assets are about $235 million.) The proposal will be submitted to the Plan Administrative Committee at its quarterly meeting on May 3rd. The proposal should be well received as the Committiee has previously requested that we optimize our existing allocation to minority money managers. Gerald Smith has been advised that Enron is looking at ways to allocate money to the firm, and that a decision should be reached sometime in May. We have not communicated the specific details of our intentions as of yet pending the outcome of the May 3rd meeting. I am available for further discussion at your convenience. Regards,
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A:
Gerald Smith