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August 24, 2001
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Money > Business Headlines > Report August 24, 2001 |
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Indian lenders may value DPC equity at a discountBS Economy Bureau The Indian lenders led by Industrial Development Bank of India are likely to value Dabhol Power Company's equity at a discount to the face value. The paid-up capital of Enron-promoted DPC is $1 billion with the US power major holding 65 per cent stake. "The joint committee of institutions will draw a blueprint to resolve the complex issue," said a senior executive of IDBI coming out a hour-long meeting with finance secretary Ajit Kumar. He, however, said that the equity valuation of DPC was not yet complete. The committee is expected to submit its report within a fortnight. The finance secretary had called a meeting of all institutions including IDBI, ICICI and State Bank of India to discuss the Dabhol power project. Amongst others, it was attended by Rakesh Mohan, advisor to the finance minister, K V Kamath, managing director and CEO of ICICI, his deputy S Mukherjee, Janaki Ballabh, chairman, SBI, VP Singh, BK Ushir and AK Doda, executive directors, IDBI and AK Basu, secretary, power ministry. According to sources, although the power minister has consistently denied the possibility of National Thermal Power Corporation taking over the project, the government has still not ruled it out. "NTPC picking up Enron's equity in DPC is still an option," a source said. Once the roadmap is ready, the lenders would also negotiate with private players including the Hindujas, Tatas and AES who have evinced interest in taking over the project, said a senior FI official. Sources also said the committee would closely look at various aspects including the cost of power and its tariff. The lenders would reduce the interest rate accordingly and the details would be worked out. "Everyone has to make sacrifices," said a source. Last week, the conciliation talks between Dabhol and the centre, were adjourned. No fresh dates have been set for resuming the talks, sources said. The debt and guarantee provided by domestic lenders led by IDBI account for 71 per cent of the total debt component in the $ 3 billion project. While IDBI has lent Rs 1.13 billion in phase I of the project and has guaranteed Rs 4.66 billion, for the second phase its exposure is Rs 4.80 billion as debt and Rs 10.67 billion as guarantee. The total fund-based exposure of all banks and institutions for both the phases of the 2,144 mega watt project including IDBI, ICICI, IFCI, SBI and Canara Bank is Rs 27.05 billion and a guarantee on another Rs 35.07 billion. Powered by YOU MAY ALSO WANT TO READ:
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