Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel
May 28, 2001
|
|
|
|
|
|
||
|
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Wedding | Women Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel |
||
|
|
||
|
Home >
Money > Business Headlines > Report May 28, 2001 |
Feedback
|
|
|
DPC lenders take a hard line, oppose MSEB moveTamal Bandyopadhyay Lenders to the $3-billion Dabhol Power Project are planning to take a hard line against the Maharashtra State Electricity Board's decision to scrap the power purchase agreement. The New York-based law firm, White & Case, which is advising the lenders, is of the opinion that the PPA-entered into by MSEB with Dabhol on May 23, 1993-is not exactly an exclusive bilateral contract. The firm feels that the PPA cannot be scrapped without the consent of the lenders, who are also stakeholders in the project by virtue of their debt exposure. Armed with the opinion of DPC's law firm including the Indian Law Institute and the advice of White & Case, the lenders are meeting in Singapore in the first week of June to chalk out the next course of action. At the meeting, lenders across the board are expected to oppose the MSEB move as they feel that the failure of the 657 mw phase I project in generating power in time (cold start in 3 hours) is a breach of warranty which can be settled through arbitration. It cannot be a valid ground for the termination of the PPA. The MSEB had issued the notice to scrap the PPA on May 23, a week after DPC served the preliminary termination notice to the board. DPC served the PTN after the foreign lenders gave their consent despite a stiff opposition put up by the Indian lenders. However, the lenders did not give DPC the consent for transfer of assets. The company, has, however appointed Arthur Andersen and Jones Lang La Salle to undertake a valuation exercise of the project. The MSEB move on scrapping the PPA has unified the entire lending community, which was vertically divided on DPC's action on serving the PTN. While the Indian lenders-who are not covered by the Centre's counter guarantee-oppose the PTN tooth and nail, the foreign lenders gave the go-ahead to the company as they were apprehensive that the MSEB might pull the plug ahead of DPC. Now both the Indian as well as the foreign lenders are planning to oppose the scrapping of PPA collectively. The Singapore meeting will take stock of the cash position of Phase II of the project which is set to go on trial run on June 7 and formalise the lenders stance whether to support or mothball the project. Powered by YOU MAY ALSO WANT TO SEE:
ALSO READ:
|
||||
