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Dabhol lenders to meet over assets

BS Corporate Bureau

Dabhol Power Company's domestic and global lenders are meeting next week in Mumbai to take a decision on enforcing the security and seizing the beleaguered company's assets.

The lenders are meeting on April 8 and 9 to review various issues connected with DPC.

Responding to a specific question from Business Standard on whether the lenders planned to enforce their security against the company, P P Vora, chairman and managing director of Industrial Development Bank of India, said, "That is what we will discuss next week. We (domestic lenders) cannot decide alone on this." He declined to spell out further details. Vora was speaking on the sidelines of a seminar in Mumbai.

The Indian lenders led by IDBI have an exposure of Rs 61 billion while the offshore lenders have an exposure of about $550 million.

Only recently, senior Enron officials at Enron's headquarters in Houston (US) had accused the domestic lending institutions of planning to seize control of DPC's assets.

Last week, the Bombay High Court had appointed a receiver to take charge of the assets. The receiver took charge on Tuesday.

The lenders' move comes in the wake of the refusal by the bankrupt Enron Corp, which holds a 65 per cent stake in DPC, to sign a sponsors' cooperation agreement with the lenders. Two other US-based companies, General Electric and Bechtel, which hold a 10 per cent stake each in the company, have agreed to sign this agreement.

The inking of the agreement would have paved the way for due diligence and a possible sale of the 85 per cent equity held by the three US-based companies.

Potential buyers of DPC's equity include British Gas, Royal Dutch/Shell, Gaz de France, Reliance, Tata Power, BSES and Gas Authority of India. All these companies have submitted expressions of interest and have already signed confidentiality agreements with DPC.

The process of due diligence by these companies could not be started as Enron has refused to cooperate.

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