Bruce:  I'm out of the office tomorrow but will be back Monday.  Let's talk 
then please.  Sara


To: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent 
Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, 
Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, arcohen@skadden.com, 
jschaub@skadden.com 
Subject: Re: Millennium - UPDATE  

Here is the update:

1. BONY is getting a legal opinion on the ADR issuance and is in contact with 
Millenium's attorneys.

2. DKB has performed investigations on whether these ADRs must be restricted, 
DKB's view is that they should not restricted.  This is highly arcane US SEC 
law (so my summary is probably missing a lot of finer points), but my 
understanding is that DKB views the sale of the local shares as a real sale, 
with a public notice, a public underwritten auction etc,and there is nothing 
restricted about the shares.  I don't think BONY would dispute that, but I 
think their interpretation (and our legal view) is that the shares are 
restricted because they are shares that were not registered with the SEC 
under the original ADR issuance and, critically, they were sold by the 
"Issuer".   That is, BONY's view is that BNDES is the same as Millenium b/c 
they are both government entities--ie BNDES is the "Issuer".  Therefore, 
regardless of the public nature of sale of the shares (and the fact that the 
shares aren't restricted for trading locally in Brazil), the shares issued as 
ADRs would be restricted per US law.

Now, ultimately we have to go with what BONY says b/c they issue the ADRs.  
However, before we charge back to BONY and argue DKB's case, I would 
appreciate a review by Skadden back to me on whether these shares if issued 
as ADRs would be restricted.  We want unrestricted, NYSE ADRs if possible.

3. When the ADRs are issued, they will be issued to PEP, a Brazil company, 
but deposited in one of the CayCo parents of PEP custody account.  We will 
need to check Brazil law and revise our MS custody account accordingly to se 
eif we can do this.  Sara, again I will try to call tomorrow, I apologize for 
the delay.

4. The plan to move the ADRs out of Brazil is as follows. There will be no 
sale and no cash movement.  There may be a CPMF.  PEP will perform an 
"in-kind" capital reduction of the shares back to its CayCo parent.  This 
will probably require some Brazil government approvals (or may not).  If so, 
what are they and how long will they take?

5. Critically, we have been advised by Brazil legal and by US tax that the 
shares if moved in this manner will move at the ORIGINAL COST BASIS.  IE, 
there is no taxbale event for US or Brazil.  Lynn, please confirm.

6. I don't have a timetable yet, I will call BONY tomorrow for an update on 
timing.

Regards,  Bruce



Lynn Aven
12/07/99 07:14 AM
To: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique 
Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent 
Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, 
Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: Millennium - ROBERT  

The PEP Cayco parent is the appropriate entity to serve as custodian for the 
ADR certificates.  PEP actually has two Cayman shareholders.  All the of the 
certificates can be issued to the 99% shareholder.  I will address via a 
separate message how the accounting entries need to be booked in order to 
reflect the fact that the 1% shareholders received shares in the capital 
reduction.

Lynn


   
	Enron International
	     Structuring Group
	
	From:  Bruce Harris                           12/06/99 05:59 PM
	

To: Bruce Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent 
Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Lynn 
Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sara Shackleton/HOU/ECT@ECT, 
Eduardo Camara/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: Millennium - ROBERT  

I spoke w/Theresa at BONY aand we have agreed on a fee of 1.5 cents per ADR.  
That works out to a fee of $231,654.00 on 15,443,600 expected ADRs.  Kent, 
who will handle the invoice from your group?  I emphasized that "time is of 
the essence".

Robert, please call me tomorrow and we can get Gareth involved to help us 
with all the issues.  Sara, I will also call you tomorrow to give you 
background.  

1. We will need to get in touch with our Brazil broker, who I assume is DKB 
(Pedro, who and at what phone number?).  

2. The broker will move our local shares to Banco Itau, the custodian bank. 

3.  BONY will issue ADR certificates to a custodian/location that we 
determine offshore (I think we would use PEP-Cayco parent, Lynn please 
confirm company).

4. I think we will use MS as custodian (assuming account contemplates holding 
physical, restricted securities--Sara, I will speak with you about this).

5. Theresa has calls in to Millenium to get "ok" and also is working to get 
legal opinion issued on issuing restricted ADRs pursuant to original ADR 
documentation (if I udnerstand the issue correctly).

6.  Once the shares are transferred, we will seek to do an "in-kind" capital 
reduction at the PEP level up to its CayCo parent and hopefully avoid any 
CPMF.  Also, we should be able to use original basis for both Brazil and US 
tax and thus no tax impact, at leats this has been indicated to us.

Regards,  Bruce


   
	Enron International
	     Structuring Group
	
	From:  Bruce Harris                           12/03/99 07:29 AM
	

To: Pedro Henrique Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Lynn 
Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: Millennium - daily  

Yes, BONY is getting back to me today with the cost to create the ADRs.  
From  tax standpoint, Lynn has determined that if we move the shares via a 
capital reduction, there will be no Brazil or US tax (other than perhaps a 
CPMF) since we will move the shares at their original basis.  So the price 
doesn't matter too much--but I don't want to take any chances with the Brazil 
tax authorities.  Better to move the shares now when the price is pretty even 
than to move it later when the price has doubled; it would be a tempting tax 
target.

Regards,  Bruce



Pedro Henrique Oliveira

12/03/99 07:02 AM
To: Kent Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: Millennium - daily  

Bruce is working with Robert and Lynn trying to create "special" ADR that 
will not be listed.

Alternatively, specially if we are going to prepay Eletrobr?s' debt, we can 
always trade some portions of the shares, on the stock exchange between Ernon 
companies.  This method would take us some time to do all our position, but 
the advantage is we would be creating listed ADRs.

Pedro







Kent Castleman
12/03/99 08:58 AM
To: Lynn Aven/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert H 
George/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique 
Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: Millennium - daily

the sotck continues to run up - what happened to the project to move the 
shares offshore?

Kent

---------------------- Forwarded by Kent Castleman/ENRON_DEVELOPMENT on 
12/03/99 08:45 AM ---------------------------


Roberto Schloesser
12/02/99 08:13 PM
To: James M Bannantine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Diomedes 
Christodoulou/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Edward E 
Graham/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pedro Henrique 
Oliveira/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Ricky Lynn 
Waddell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Connie F 
Estrems/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kent 
Castleman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: Millennium - daily