I was in Spain with the Credit Department to receive a list of assets and 
supporting
documentation from GMP that they were to prepare to convince Enron the 
company had a 
chance to make it through its present difficulties.  The overall situation is 
that this business
has ground to a halt.  They are a distribution company without any supplies 
or suppliers
willing to supply them on open credit and no bank lines.   Thus they are 
making no sales
and have no cash coming into the business.  They are owed 12 mil dollars 
presently from 
their customers for previous deliveries.  They are unlikely to recover this 
outstanding
receivable without a resumption of deliveries.

The above reflects the situation that we were working with GMP to improve 
with the 
thought that their outstanding debt was appx 30 million dollars.  The 
situation this week
we found out was considerably worse.  They disclosed that they had not paid 
the 
Spanish tax authorities since September the vat taxes they collect on the 
government
behalf.  25 mil usd is the amount of overdue taxes and that number will 
continue to increase
depending on the rate of interest they are charged and the penalties imposed 
upon them
for their default.  Given the debt is to the tax authorities this poses 
further difficulties.  The 
tax authorities have preferential rights over all other creditors  There is 
no time bar that
limits the time period that the courts can look back to quantify when a 
company became
effectively bankrupt can be absolved as not legitimate.  The payments we 
received since
September (50 million) could therefore be viewed by the courts as money that 
should have
been paid by GMP to other creditors.  Looking through the records some of 
this payments
were for cargoes being delivered in that time (appx 18 mil) but the majority 
(32 mil) was
the paying down of previous debt.

Our existing debt situation is as follows:

5 mil unsecured debt on oil sold to GMP

13 mil unsecured debt on mark to market exposure.  Four vessels were 
delivered over
November and December by Enron to Ectric Spain that priced to GMP over the 
month
of delivery.  GMP was to prepay this oil to Enron as they lifted the 
product.  We entered
this arrangement to try and keep them operating and also allow them to meet 
their
strategic stock requirements.

Our risks under a claw back by the courts for preferential payment while GMP 
insolvent:

20 million in strategic stocks (this oil was initially sold by Enron to GMP 
and then the title
was passed by GMP to Ectric Spain when GMP was in default on the payment).   
Concern
here being that if the courts declared GMP bankrupt at the time that the 
title was transferred
that transaction could be declared null and void.  Enron would have to 
liquidate the physical
oil and the proceeds divided amongst all the creditors.

?? million on money received by Enron in preference to the other creditors.  
The main 
concern here is the 25 million owed to the tax authorities.  The debt of the 
other suppliers
and banks is as follows:

veba 15 mil.  total 3 mil.  vitol 1 mil.  deutche bank 10 mil.  we don't feel 
that there is a
significant case of preferential treatment to us vs these other suppliers.

Actions we are taking going forward.  

1) Speaking with Veba about insisting on a professional liquidation 
practitioner being hired
as a precondition for any further support.  

2) We are in the process of selling all the oil that we hold in Spain.  We 
want to eliminate the
possibility of the courts putting a freeze on the oil we have in Spain in the 
event of bankruptcy.

We will continue to pressure this company to refinance their company.   In 
March 2000 we 
conducted a detailed review of their books and they were worth 5 mil usd.  We 
don't believe
that the business has lost money anywhere near the level of present 
indebtedness and actually
would have expected 2000 to have been a profitable business environment for 
them.  Thus,
it is our conclusion that they have been taking money out of the company. 

I will update you further on what if any assets they do bring forward to 
improve this outlook.
David/Robert please add in where you feel I've left out anything important.

Thanks, 

Chris.