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Enron lenders meet to discuss DPC revival
April 01, 2003 12:41 IST
Lenders to bankrupt Enron Corp's $2.9 billion Indian power plant met for a new round of talks in Singapore on Tuesday to thrash out an agreement to revive the stricken project, an official said.
The two-day meeting comes nearly a month after foreign lenders led by ABN AMRO Bank demanded repayment of almost $339 million of loans, threatening to pull out of the power venture because of endless bureaucratic delays.
"The lenders are holding the meeting to try and resolve outstanding issues and revive the plant," said an official at an Indian financial institution who did not wish to be identified.
Nearly 30 financial institutions lent $1.9 billion to build the 2,184 MW gas-fired power plant and an adjacent terminal to import liquefied natural gas. The plant is at Dabhol, 250 km south of Mumbai.
Some of the loans by foreign banks are guaranteed by the central and state governments.
The controversial power plant, Enron's largest Asian asset, has been idle since June 2001. The now-bankrupt US energy trader, which owns 65 per cent of Dabhol, shut it down when the sole customer, the unprofitable Maharashtra State Electricity Board, fell $240 million behind in payments.
Foreign and Indian lenders have differed on whether to back a plan by domestic banks to sell the plant to a new owner.
General Electric Co and privately held Bechtel own 10 per cent each, while the remaining 15 per cent is held by the MSEB.
The Indian lenders are led by the Industrial Development Bank of India, the State Bank of India Ltd and ICICI Bank. Foreign lenders include Citibank, ABN AMRO and Bank of America.
IDBI, the lead lender, proposed in August that MSEB should buy power generated from the plant at Rs 2.86 per unit, a proposal shot down by the Maharashtra government -- the owner of the board -- as too expensive.
The central government in November decided to allow state-run National Thermal Power Corp, India's largest power utility, to operate the plant, but it remains closed.The Bombay high court in March 2002 granted a request by the creditors to appoint a receiver to ensure the idle plant is properly maintained. It also barred the plant from becoming part of any US court-supervised bankruptcy proceedings.
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