Here is the answer regarding the approvals in South Korea.  You will see Mike 
is concerned about shareholder agreements, which I have not raised with you 
before, as that seems beyond the scope of what you asked for, and I assume 
that we encounter this in many deals, but he has elaborated his concerns 
below, whcih are there for you to reach your own views on.  Let me know if 
you need more.   mcs
---------------------- Forwarded by Mark Schroeder/LON/ECT on 02/06/2000 
17:09 ---------------------------


Mike Dahlke@ENRON_DEVELOPMENT
02/06/2000 15:49
To: Mark Schroeder@ECT
cc:  

Subject: Re: CONFIDENTIAL - MORE - back  

Mark

You are correct that asset sales will bring into play considerable "approval" 
issues, e.g. transfer of the "franchise" or business license of 9 separate 
CGCs.  A stock sale generally avoids these issues.  If the Enron then plans 
to "sell" it's direct shares in the JV, then there is, I believe a "Fair 
Trading Commission" notification that is required.  Your word, "proforma" 
probably describes the nature of FTC approval here.  However, this may not be 
an insignificant matter if  a "buyer" such as Tractable or Samchully were 
involved the FTC might be "active" in it review of the transaction because of 
concerns about the Seoul Metropolitan area. 

I still believe Enron's biggest challenge related to dealing the JV shares 
directly, is the "honeymoon" clause in the "Shareholders' Agreement"  between 
ourselves and SK Corp.  Darrell Kinder commented to me recently that he did 
not feel that the "monetization" process that was being developed would 
suffer as a result of this clause - he said he couldn't see on what basis SK 
would object.  A transaction that involves another true "industry" buyer, 
however, may be a very hard sell to SK.  Regardless of the nature of the 
buyer (financial institution or energy sector operator), SK is likely and 
legitimately bargain hard.  Enron, considering they have always maintained 
that a partnership with Enron was one of their objectives for organizing the 
JV with us.  It is said that our price was not the highest one but SK's 
Chairman Chey "broke the tie" based on his reception in Houston in October of 
1988.  Hence, SK might now oppose strongly to protect itself.

If Enron should sell the shares of Enron, Korea LLC rather than the 
underlying shares in SKE, then it may be subject to some notices in the US 
(check) but may avoid the kOREAN issues.  But it may avoid the "honeymoon" 
period approval by SK Corp. (Legal/Tax questions for the most part).

The "change of control" issue that I briefly mentioned is relates to any 
language that triggers the "honeymoon" provisions based on the "ultimate" 
parent being some entity other than Enron.  If such language is lurking 
somewhere in the document. then all roads would seem to lead back to having 
SK Corp's blessing.

Hope this is clear as jet lag has grabbed my brain this evening.

Mike D.

___________________________________________________________________
Author: Mark Schroeder, June 2, 2000
To: Mike Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: one more

Still in confidence:  Is there any required notification to competition 
authorities in South Korea, like the US version of Hart-Scott-Rodino, for 
changes in asset control ownership?  thanks  mcs

_____________________________________________________________________



Mark Schroeder@ECT
06/02/2000 04:06 AM
To: Mike Dahlke/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: CONFIDENTIAL - MORE

Mike - I think I am correct in inferring from your note on the subject of the 
financing we have been reviewing, that sale of our stock in the joint venture 
triggers no regulatory approval, and that this also implies that there would 
then be NO local approvals required.  Your earlier e-mail noted the "pro 
forma" (my word choice, not your's) approval for transfer of assets, but I am 
assuming that this does not extend to changes in ownership at the 
parent/holding company level, i.e., there is no intnetion to reach what would 
be a de facto change in ownership/control of assets via a stock sale.  
Hopefully, I am being clear, if not let me know, and more importantly, let me 
know if I am correct.  thanks  mcs