MG Middle Office Integration : Weekly Newsletter ,
 FYI -=20

Also, Mike and I are working with Tim to integrate the MG DPR into ours.

Regards
---------------------- Forwarded by Shona Wilson/NA/Enron on 07/07/2000 07:=
47=20
AM ---------------------------


Tim Poullain-Patterson@ECT
07/07/2000 02:50 AM
To: ECT European Middle Office
cc: Richard Sage/LON/ECT@ECT, Phil Redman/LON/ECT@ECT, Beth=20
Apollo/LON/ECT@ECT, Stephen Wood/LON/ECT@ECT, Michael Heap/LON/ECT@ECT, Ale=
x=20
Holland/LON/ECT@ECT, Andrew Cornfield/LON/ECT@ECT, Naomi Connell/LON/ECT@EC=
T,=20
Fernley Dyson/LON/ECT@ECT, Eric Gadd/LON/ECT@ECT, Scott Earnest/HOU/ECT@ECT=
,=20
Bruce Garner/Corp/Enron@ENRON, Amita Gosalia/LON/ECT@ECT, Lara=20
Fields/HOU/ECT@ECT, Fiona Grant/LON/ECT@ECT, Tani Nath/LON/ECT@ECT, Janine=
=20
Juggins/LON/ECT@ECT, Andrea M Kerch/LON/ECT@ECT, Lloyd Fleming/LON/ECT@ECT,=
=20
Barry Sangster/LON/ECT@ECT, Shona Wilson/NA/Enron@Enron, Brent A=20
Price/HOU/ECT@ECT=20

Subject: MG Middle Office Integration : Weekly Newsletter

Hi,

Welcome to the first of a series of weekly MG bulletins informing you of=20
progress with the integration.

So, what=01,s happening?

1) Status of Acquisition :

two days ago Enron reached a key threshold of 90% acceptances for our=20
previously announced "conditional" cash offer.

under take-over rules, this means that we can now nominate the date from=20
which our offer goes "unconditional" and from which we will have "effective=
=20
control" - for legal, tax and treasury reasons that date will probably be=
=20
sometime during the week 17th-21st July.

the "effective control" date should not be confused with the date from whic=
h=20
MG plc results will be "consolidated" with those of Enron Europe - for=20
practical reasons we actually have some discretion which date we chose to=
=20
consolidate from, within the range 1st July to 1st August.

various groups of Enron personnel are engaged in the integration effort and=
=20
Richard Sage is co-ordinating on behalf of Fernley Dyson - the reason I am=
=20
sending out this bulletin is that Mike has asked me to co-ordinate the=20
integration of the Middle Office!


2) This Week

EnronOnline initiative - coincidently, at around the same time that Enron=
=20
launched EOL, MG launched their own internet trading platform for base meta=
l=20
products. There has been a lot of discussion about how we move MG's interne=
t=20
based business over to EnronOnline in order to be able to offer our=20
burgeoning EOL client base a fuller range of products. However, as a first=
=20
step this week we launched three new base metals products, not previously=
=20
traded by MG, on EnronOnline and so on Monday we did our first base metals=
=20
trades!=20

using the "Doorstep" format, Brent Price is leading a controls review to he=
lp=20
us assess operational risks, and generally focus on the areas that we need =
to=20
think about as we get nearer to consolidating MG's business with our own.

a detailed valuation review was kicked-off yesterday to ensure that MG's=20
valuation and reserving methodology is consistent with our own.

today a project team is being assembled to figure out how to migrate MG to=
=20
SAP. Given our experience of 1st October and 1st July go-lives this should =
be=20
a piece of cake!!


3)  Next Week

on Monday we will be presenting the Enron Model to MG to help them understa=
nd=20
where we are coming from! This will involve stepping them through our=20
definition of Roles & Responsibilities for each of the functional groups th=
at=20
make up the front, middle and back office, and introduce them to the variou=
s=20
Enron people who will be responsible for helping MG to transition to this=
=20
model over the coming months.


4) Out there somewhere...

The plan is still to move the entire London based MG business into Enron=20
House in mid-September though we may find some MG staff joining us before=
=20
then. MG run a fairly lean operation and the integration effort will requir=
e=20
Enron people on the ground to ensure that the ongoing business is not=20
adversely hampered as certain business processes are adapted to our model.=
=20
This will inevitably lead to new opportunities for people to move across to=
=20
the base metals business and visa versa...

The above is a fairly concise summary so if you'd like more information=20
please feel free to call me directly on x 34264.

Regards,
Tim
sally.beck@enron.com