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Dabhol issue to be cleared via arbitration: Lay

Chuck Watson, chairman of Dynegy Inc, said on Sunday that the trading operations of the recently acquired Enron was still sound, and played down concerns over financial disclosures as "financial noise."

"Industry still has high regards for Enron's trading business," Watson said.

Watson and Kenneth Lay, ex-chairman of Enron, spelt out the details about the merger and expressed confidence that authorities will clear the deal since there are no overlaps in businesses.

Referring to India and Enron's investments in the Dabhol Power Company, Lay said: "We have strong legal remedies and we are heading towards arbitration. We would, however, like to work out a settlement with the government."

The Maharashtra government owes DPC around $64 million in unpaid dues.

Buyers like Tata Power and BSES are likely to start their due diligence on the company soon, but the asking price of $ 1 billion is acting as a dampner on developments.

Last Friday, the much-smaller Dynegy had agreed to buy the once-mighty, $100 billion Enron for around $23 billion including at least $8 billion in stock and $15 billion in assumed debt.

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