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Enron may sell majority stake in India

US energy giant Enron Corp plans to sell a major share in Dabhol Power Company, its controversy-ridden power project in the state of Maharashtra, a business daily said on Friday.

The newspaper said leading investment bankers were making presentations to Enron for the mandate to sell its stake in the $3 billion venture.

Enron could not be immediately reached for comment.

The 2,184 MW power project has four equity partners - Houston-based Enron with 65 per cent, US giants General Electric and Bechtel with 10 per cent each, and Maharashtra State Electricity Board with 15 per cent.

Under the original project plan finalised four years ago, MSEB's stake was to increase to 30 per cent, and Enron's to fall to 50 per cent, through additional investment by the state electricity board to finance construction of the second phase of the project.

But faced with financial problems, MSEB informed Enron last year that it would be unable to buy the additional 15 per cent, leaving Enron to scout around for another buyer. Enron said in January it plans to sell the 15 per cent stake.

But a payment row with the MSEB and growing political opposition to Enron's expensive power project has raised speculations that the US energy giant may pull out of the project.

The daily, quoting unnamed sources, said Enron will require an approval from its lenders if it wants to pull out of DPC.

Enron may seek this approval at its lenders meet in London on April 23, it said.

The MSEB has been defaulting on payments since October for electricity purchased from Dabhol's 740 MW power plant on the state's west coast. The amount outstanding totals Rs 2.26 billion.

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