THE PROBLEM

RESPONDENT’s EXHIBIT R 1
Tue 10/11/09 9:23 a.m.
Yan Malmesburry
To
From
Re
contract.management@SantosD.me
info@SantosD.me
De-risking contracts
Dear Colleagues,
Following the information of last week that our parent company Engineering International
has decided to concentrate on its core business and intends to sell us and Drake Ltd,
producing ship engines, a first meeting discussing details of the plan has taken place yesterday
at the premises of Engineering International. The meeting was attended by myself, the CEO
of Drake Ltd as well as the CEO’s of all other subsidiaries of Engineering International with
whom we had joint projects in the past, including the new CEO of Wright Ltd, Mr. Sacadura
Coutinho.
One of the points discussed was the need to “de-risk” SantosD and Drake Ltd to make them
more attractive for potential buyers. In particular, all currency risks contained in our contracts
should be identified and be reduced. It was agreed that whenever these risks are contained in
contracts with other subsidiaries of Engineering International, the relevant contract managers
of our counterparts should do their best in helping us to reduce our risks, by either agreeing
on fixed exchange rates, where the contracts provide for a floating rates, or by finding other
hedging strategies which reduces our exposure to currency risks.
As Engineering International has a great interest in finding a buyer for SantosD we should
make use of our strong bargaining position and should reduce the risks as much as possible.
Could I therefore ask you to identify all contracts with currency risks and report them to me
no later than next Friday.
Sincerely,
Yan Malmesburry
SantosD KG
77 Avenida O Rei
Cafucopa
Mediterraneo
T (0) 146-9128
Fax (0) 146-5634
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Prof. Dr. Stefan Kröll