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Belgium's Tractabel to divest India stake

Yet another foreign power firm is bailing out of India, several financial newspapers reported on Thursday.

Belgian power firm Tractabel plans to sell its stake in a joint venture with India's Jindal Vijaynagar Steel Ltd, said two newspapers.

Tractabel, a subsidiary of the giant French water and power utility company Suez Lyonnaise des Eaux SA, will receive Rs 2.35 billion for its 50 per cent stake in Jindal Tractabel Power Company and reimbursement of development expenses.

The Economic Times said lenders to the project would buy a 38 per cent stake in Jindal Tractabel, while the Jindal group would buy the remaining 12 per cent from Tractabel.

The Times of India put the sale price at Rs 2 billion, and provided a more detailed description of the terms of the sale to Indian financial institutions and O P Jindal Group companies.

The financial institutions were identified as the Industrial Development Bank of India and ICICI Ltd, and the O P Jindal group companies as Saw Pipes and Jindal Power.

A senior official of the Jindal group, founders of JVSL, declined to comment when contacted.

The joint venture owns a 260 MW power plant at Bellary in the southern state of Karnataka, and supplies power to a nearby JVSL steel unit.

Tractabel's exit from India comes at a time when US giant Enron Corp is locked in a battle with a utility in India's Maharashtra state, which has defaulted on $48 million in power payments.

Other international power firms have also found the going tough in India due to regulatory delays and litigation.

US firm Cogentrix exited a 1,000-MW project in Karnataka in 1999, Electricite de France scrapped plans for a 15 per cent stake in a $1.4 billion project in Maharashtra last year, and South Korea's Daewoo Corp abandoned a 1,070 MW project in central India.

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