Message-ID: <13315748.1075844969924.JavaMail.evans@thyme> Date: Mon, 30 Apr 2001 01:23:00 -0700 (PDT) From: stanley.horton@enron.com To: enron@eott.com Subject: Re: EWC - Weekly Update/Week Ending 27 April Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Stanley Horton X-To: Adam_Umanoff%ENRON@eott.com X-cc: X-bcc: X-Folder: \Stanley_Horton_2\Notes Folders\Sent X-Origin: HORTON-S X-FileName: shorton.nsf Thanks for the report. The level of detail was on target. Let me know when you want to discuss comp issues. Adam_Umanoff%ENRON@eott.com on 04/29/2001 12:23:55 PM To: Stanley_Horton%Enron.com%Eott@EOTT.COM cc: Subject: EWC - Weekly Update/Week Ending 27 April 1. Aura. - Received revised bid from UBS which Metts describes as "real." UBS will now commence detailed 6-8 week due diligence on EWC (at Enron's expense if deal busts). Confidence re: UBS' ability to execute remains mixed. - LJM (Fastow) interest continues, but unclear how parallel process can be run. Umanoff concerned about conflict when management assists seller as part of UBS deal but assists buyer as part of LJM deal. - Now that '01 numbers scrubbed, in process of revising '02 financial projections based on detailed internal review (as of December, 2000, '02 EBITDA projected at approximately $115mm; up from 1CE '01 projection of $78mm). This is unrealistic; I expect 2002 EBITDA in the $90-95mm range, showing solid 15-20% EBITDA growth. 2. M&A Activity. - acquisition of assets of bankrupt Dutch blade manufacturer, Aerpac, continues; we have closed on several assets and expect final closing in May. - sale of Greek operating projects to German buyer continues, but execution uncertain. Closing targeted for June 30. Sale of Greek development company also launched, with 2 parties expressing interest. 3. 2001 Commercial Activity. - US backlog remains firm. Projected demand continues to exceed our projected turbine supply. Key execution issue is confimation of suitability of 1.5 MW turbine (primarily its gearbox) in more rigorous US wind regimes. - American Electric Power has provided indicative bid to purchase the two Texas projects we have under development (Indian Mesa I and Clear Sky); indicative bid price is attractive. AEP has requested Enron Corp guaranty of EWC's turbine warranty, like they have received on previous sales with EWC. Enron Corp guaranty is approved internally, but, in light of Aura, we will continue to bargain for no Enron Corp credit support. Finally, debt financing expected to close on IMI in May and debt circled on Clear Sky in June. Turbine suitability due diligence is key pacing item for debt closing. - European backlog remains firm, expect for Spanish sales of 750kw turbine, which remains soft. EWC attended Hannover Fair last week, the largest industrial trade show in Europe. Our exhibit was very well received. CEO of German competitor, Enercon, approached Umanoff to discuss IP issues (Enercon is currently barred from US market on patent infringement grounds). 4. HR Issues. - US has lost O&M director and 2 key commercial employees have expressed concerns. Need to finalize retention program (Umanoff to discuss with Horton early in week). - Key recruiting initiatives are: GM Spain; head of global procurement/blade MFG; European GC. Umanoff would also like to re-visit hiring US GM/MD, as day-to-day US operations require more detailed oversight than Umanoff is currently providing; not clear if we can recruit for this position in the midst of Aura. Stan - for the future, please let me know whether this is the right level of focus. Talk with you soon. Adam