FW: Deconsolidation of Dabhol if Enron's shares are increased to 65% 
FYI -

Bechtel has requested that the agenda for the DPC board meeting next week include a vote to issue the Phase II shares.  Once the shares are issued, Enron will have 65% voting rights and will be able to control the matters which require majority consents (the memo attached below contains a summary of such matters).

Mary Cilia and I had worked with Mike Jones (AA) on this a few months ago and he had agreed that we could avoid consolidation of DPC by entering into a legally binding side letter with GE and Bechtel waiving our majority consent rights and agreeing to vote as a block with them on such matters.  AA's concurrence is subject to their review the side letter and confirmation that it is legally binding.

Jeff Sommers and I are scheduling a meeting with Mike Jones for tomorrow to ensure that the previously reached conclusion still stands.
 -----Original Message-----
From: 	Cilia, Mary  
Sent:	Tuesday, May 22, 2001 7:37 PM
To:	Causey, Richard; Butts, Bob; Colwell, Wes; Faldyn, Rodney; Sommers, Jeffrey E.; Howes, Carol; 'michael.d.jones@us.arthurandersen.com'; 'david.b.duncan@us.arthurandersen.com'
Subject:	Deconsolidation of Dabhol if Enron's shares are increased to 65%

To All -

Attached is the memo documenting our conclusion on the continued deconsolidation of Dabhol if Dabhol Power Company were to issue the Phase II shares that the investors are currently entitled to.  Such an issuance would increase Enron's interest in the company to approximately 65%.  In short, as long as Enron waives its majority consent abilities in a legally binding side letter with GE and Bechtel, we would not have to consolidate Dabhol.  If you have any questions, please don't hesitate to respond.  Thanks.

Mary

 

