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DPC lenders in talks on project fate

Indian and foreign creditors of ruined energy giant Enron Corp's $2.9 billion Indian power unit started talks in Singapore on Thursday to find ways to revive the stalled project.

"The meeting started about half an hour ago. There are more than 20 people at the meeting, including people from Enron's Indian unit," a source close to the talks said.

The meeting is the first since Enron filed for bankruptcy last week.

The lenders have exposure of about $1.9 billion to Dabhol Power Co, which had almost completed the 2,184 megawatt project in Maharashtra.

Overall, Enron Corp says it has about $15 billion in bank debt, of which only about $2 billion is secured.

The company has bond debt of $15 billion, $13 billion in trade debt -- of which $8 billion is for derivatives and $5 billion is to banks and for bonds -- and surety debt related to contract delivery of $2.5 billion.

Enron shares, despite bouncing off an intraday low of 52 US cents, closed down six cents at 66 cents on the New York Stock Exchange on Wednesday. The shares have traded in a 52-week range of $84.88 to 25 cents.

Indian financiers -- led by state-run term lender Industrial Development Bank of India, ICICI Ltd and the State Bank of India -- have exposure of about $1.4 billion.

Foreign lenders -- which include Citibank, Bank of America and ABN AMRO -- have lent about $500 million to the Indian project.

INDIAN PLANT GATHERING DUST

Enron owns 65 per cent of Dabhol. General Electric Co and construction firm Bechtel Corp each own 10 per cent and the Maharashtra State Electricity Board holds the remaining 15 per cent.

Dabhol stopped work on the second phase of the power plant, once a showpiece of India's foreign investment, following a dispute with the state electricity board, the plant's sole buyer.

The plant has been idle since June and Dabhol has laid off all of its employees. Enron has said it wants to exit the project and sell the stake of all three foreign shareholders.

In the weeks before Houston-based Enron's collapse last month, all parties involved in the Dabhol project, including Indian and foreign lenders, were hoping to resolve the matter by finding a buyer for the plant and adjacent liquefied natural gas terminal.

Two publicly listed Indian power companies -- Tata Power Co and BSES Ltd -- in particular demonstrated strong interest in picking up the stake, but Enron's bankruptcy has now further complicated the process.

Indian media reports said the Videocon Group, whose interests range from consumer electronics to home appliances, plans to make a bid along with an unnamed partner for the foreign stake. An Indian government official told Reuters earlier this week that India wants the financial institutions to invite bids for Enron's equity and, if this fails, for the institutions to buy out the equity.

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