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Indian lenders urge DPC restructuring
Muralikumar Anantharaman in Singapore |
April 02, 2003 17:15 IST
Indian lenders to bankrupt Enron Corp's $2.9-billion Dabhol power plant want the idle project to be restructured, an official said after two days of talks with foreign lenders in Singapore.
"The message we gave them is, according to us, the only way to save this project is for lenders to restructure it. All stakeholders will have to share the pain equitably," an official at an Indian bank, who declined to be identified, said.
"We did not talk about any particular restructuring. We are in the process of appointing Rothschild as the financial advisor and we will be guided by what they say, because ultimately at the end of the day, we want a viable project," the official said.
The foreign lenders said they will discuss the idea internally and take a decision, the official added.
The meeting was held 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 Indian lenders to the project 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.
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 India's 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 percent of Dabhol, shut it down when the sole customer, an unprofitable provincial utility, 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 percent each, while the remaining 15 percent is held by the Maharashtra State Electricity Board, the sole customer.
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 Union 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.An Indian 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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