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Enron spikes Tata, BSES offer for Dabhol stake

Enron Corporation has rejected the informal offers of Tata Power and BSES Ltd to pick up its stake in Dabhol Power Company as it is not ready to sell its $1.1-billion equity at a discount.

Senior FI sources said Enron India chief K Wade Cline has made it clear to both Tata Power and BSES that the multinational and its partners, GE and Bechtel, were not in favour of reducing their equity value in Dabhol for the buyout.

The equity value is included in the cost incurred by the stakeholders in developing, constructing and operating the $3-billion project over the last nine years, they said.

When contacted, BSES chairman and managing director RV Shahi confirmed his meeting with Cline alongwith IDBI chief PP Vora and said, "I made it very clear to them that the project is not durable, unless it is financially re-engineered and the tariff reduced to an affordable level."

BSES, which had decided against buying a stake in the troubled power project, has opined that the capital cost of the 2,184 mw project should be brought down, foreign loans should be converted into rupee debts and a moratorium be imposed over their repayment, he said. "I have also suggested delinking of the $800 million liquefied natural gas facility," Shahi said.

On the other hand, FI sources said Cline said the same thing to Tata Power managing director Adi Engineer during their meeting last week.

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