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IFCI not to hike exposure in DPC till buyer is finalised

IFCI said on Monday that it would consider enhancing exposure in the $2.9-billion Dabhol Power Company only after the buyer for Enron's stake was finalised, hopefully by the end of this month.

"We will decide after the Enron issue is sorted out and a private player is identified (for buying Enron's 65 per cent stake)," IFCI chairman V P Singh told reporters.

IFCI was unlikely to hike its exposure before the buyer was finalised, he said, adding there was no further commitments to the project since the second phase of the project had been stalled.

The move comes in the wake of IFCI deciding to reduce its exposure in power sector which were at Rs 16.54 billion or 8.29 per cent of the total Rs 199.53 billion till March 2001.

IDBI had also given similar indication on further loans to the Enron-promoted company.

IDBI, along with ICICI, IFCI, LIC, SBI and other lenders have over Rs 62-billion exposure in DPC, which ran into rough weather after Enron decided to quit India.

The IDBI-led consortium was considering at least three alternatives including rescheduling of loans and reduction in interest rates by 1.5 per cent to 15 per cent, as part of restructuring plan of 1,444 MW Phase-II of the project.

So far, Tata Power Company and BSES had bid for the 65 per cent stake of DPC, Singh confirmed.

On the overall power scenario, Singh said IFCI had been asking for escrow arrangement since many states had not reformed their power sector and were still continuing with irrationally low tariff structure.

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