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