French energy major TotalfinaElf today distanced itself from the bidding process for 85 per cent stake in Dabhol Power Company saying it cannot be put on the list of Dabhol's potential bidders.
"We are not signing the confidentiality agreement nor even participating in the due diligence process," TotalfinaElf chief executive (India) Jean Claude Breton told PTI here.
This follows the rejection of the overseas bidders' proposal to split the 2,184 mw, $ 3 billion company into two and sell each separately.
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The rejection had virtually slammed the door on the foreign bidders Shell and TotalfinaElf.
The two prospective foreign bidders made it clear at a meeting with the institutions led by the Industrial Development Bank of India on Monday that they were interested in the liquefied natural gas (LNG) facilities developed by DPC but were not willing to buy the power plant.
However, the institutions asked them to form a consortium and bid for the entire project as the FIs were keen on clearing the imbroglio fast. "At this point, the overseas companies made it clear that they would not be in a position to form a consortium and bid for DPC. This in effect closed the chapter for them," said an institutional source.
Tata Power and BSES are the two Indian power companies which have made bids for DPC. The third prospective Indian bidder is the Gas Authority of India Ltd (GAIL), a domestic gas distribution company. However, GAIL is also keen on the DPC's LNG project. It has announced that it is keen on a tie-up with Tata Power and would bid jointly for DPC.
At the meeting of prospective bidders, domestic lenders and a visiting OPIC team on Monday, the foreign companies proposed that the DPC be split into two companies--a gas company and a power company.
The FIs suggested that the international gas majors seek alliances with interested power companies so that the could form consortium to bid for DPC. The FIs' argument was that such a route would save the company precious time since a division of assets and the formation of two companies could delay the entire process. But the foreign companies are reported to have rejected this idea saying "they have no mandate from their apex management to enter into joint ventures, alliances or consortiums."
"Time is a consideration of the DPC and the institutions. We pay only for assets that we wish to acquire," sources at one of the bidders said.
"As it is, the time-frame for the sale of DPC is so optimistic that it borders on the unrealistic," this source said.
The financial institutions and domestic banks are trying to push through the sale fast as they have an exposure of about Rs 6,000 crore in DPC.