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Countdown begins for Dabhol

S Ravindran

Global lenders to the Enron-promoted Dabhol Power Company are meeting in London on November 30 to consider authorising the company to serve a final termination notice to the Maharashtra State Electricity Board.

On the same day, the DPC board too will meet in London to consider authorising managing director K Wade Cline to serve the final termination notice on MSEB. Even if Cline gets the nod from the board, he will not be in a position to serve the notice unless the lenders give the go-ahead.

“We have decided to meet on November 30 as it is convenient for us. The DPC board meeting is a pure coincidence,” sources in the lenders consortium said.

The meeting assumes significance as it is being held in the backdrop of a Bombay High Court injunction restraining DPC from serving the final termination notice.

The lenders are planning to consult their lawyers, White Case, about the feasibility of such a move.

The steering committee of the lenders comprising Credit Suisse First Boston, Citibank, Bank of America, OPIC, ANZ Investment Bank and the Industrial Bank of India will meet to take stock of the situation.

The serving of the final termination notice may pave the way for proceedings in the London Court of Arbitration. The move by the global lenders is likely to be staunchly opposed by IDBI on behalf of all domestic lenders.

If the issue ultimately goes to the London Court, then the state government will be on a sticky wicket. The domestic lenders too will take a beating as their exposure is not covered by the counter guarantee of the Union government.

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