Talks have begun between Indian and foreign lenders of the Dabhol Power Company in Singapore to buy out the latter's debt exposure of over $310 million in the beleaguered company.

The IDBI-led consortium of Indian lenders have offered 30 cents per dollar for the foreign debt exposure in the phase I and 60 cents per dollar for phase II of the 2184 MW power project, FI sources in Mumbai said on Thursday.

"Talks have been optimistic and will continue tomorrow (Friday)", they said.

The Indian lenders have decided to form a special purpose vehicle to take over the debt and have sought government guarantee for the SPV, sources said.

The high-powered Naresh Chandra committee on Dabhol is believed to have asked lenders to hasten up the process and settle the matter with GE and Bechtel, who have recently taken over 65.8 per cent stake of bankrupt power trading giant Enron.

The two foreign partners now hold 85 per cent stake in DPC that owes over Rs 6,000 crore (Rs 60 billion) to IDBI, ICICI Bank, SBI and others. DPC owes $310 million worth of outstanding debt to offshore lenders.

The domestic lenders want to take over the debt so that the company could be handed over to a new sponsor.