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DPC lenders meet in Singapore

Foreign and domestic lenders to the collapsed Enron Corp's $2.9 billion Indian power plant held a second day of discussions on Thursday on how to select a buyer for the project's 85-per cent foreign equity stake, said an official of one of the plant's lenders.

ABN AMRO, one of the advisors, hosted the meeting where lenders were trying to thrash out the bidding process for the plant.

More than 20 lenders, including both Indian and foreign banks, have a combined exposure of nearly $1.9 billion to the project, once the showpiece of foreign investment in India.

"The meeting is in progress but we have not reached any decision yet. I hope that by the end of today we should have a better picture of where we are heading," said the official, who declined to be identified.

Among major issues being discussed at the meeting was how bidders could carry out due diligence, said the source.

Several companies have made preliminary bids or "expressions of intent" for the foreign stake in Dabhol Power Co, the company set up to build and operate the 2,184 MW power plant, Enron's most valuable asset in Asia. They will now have to submit financial bids.

Enron owns 65 per cent of DPC, General Electric Co and U.S.-based contractor Bechtel Corp each own 10 per cent of DPC. The remaining 15 per cent is held by the Maharashtra State Electricity Board.

The Industrial Development Bank of India, the project's lead creditor, invited preliminary bids on January 30 for the entire 85 per cent foreign stake in DPC.

Among the international bidders are British Gas, Royal Dutch/Shell and French utility Gaz de France. Indian bidders include Reliance Industries Ltd, the country's largest petrochemicals maker, private power utilities BSES Ltd and Tata Power Co, and state-run Gas Authority of India Ltd, the country's largest natural gas distributor.

The power plant, located about 250 km (156 miles) south of Mumbai on the coast of the Arabian Sea, has been idle since June 2001 following a payment dispute with the MSEB, a financially strapped state-power distribution monopoly and sole customer of the Dabhol plant.

The 740-megawatt first phase started operations in May 1999 and the 1,444-MW second phase was nearly complete when construction was halted in June after the MSEB fell $240 million behind in payments for power already supplied.

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