Indian lenders to invite fresh bids for Enron's DPC stake

The consortium of Indian lenders and the US government-promoted Overseas Private Investment Corporation (OPIC) are set to invite fresh bids for Enron Corporation's 65.15 per cent stake in the beleaguered Dabhol Power Company (DPC).

According to sources, new bids can be invited in February and the deal may get sealed by March end ahead of the general elections.

The Centre is actively involved in the entire process, sources said. "The Union finance ministry authorities are pushing to complete the bidding and sale process at the earliest," said sources in the lenders' consortium.

The entire process is subject to Indian lenders striking a deal with foreign counterparts regarding their debt exposure in the DPC project.

Sources claim that foreign lenders "are yet to make a counter offer on how much discounts they would like to offer on their exposure in DPC".

Earlier attempts to buy out foreign lenders' debt by Indian lenders had fallen through as offshore lenders were not agreeable for a substantial discount. The outstanding foreign debt on account of Phase I of the project is worth $90 million.

Reliance Industries, Tata Power and British Gas were among the six bidders that had submitted expression of interest for buying Enron's stake in DPC around two years back.

With no solution in sight, financial institutions returned the money submitted by these corporates which was to the tune of $100,000 each.

"Some of the old bidders may make fresh bids. There could be new bidders as well," said a source.

In early 2003 foreign lenders had demanded that they be bought out by the Union government for $339 million which would take care of their exposure in both the phases of the power project.

The domestic lenders' consortium has appointed NM Rothschild to work on a detailed plan which will help in a transparent bidding process.

Even as OPIC is evaluating the option it has with the Enron Corp to buy out the latter's stake in DPC, it is pushing for resolving the problem as it does not plan to remain as a stakeholder in a power company.

OPIC team members have held consultation earlier this month with Union finance ministry authorities, Maharashtra government, lenders consortium and several corporate houses which had earlier evinced interest in the project.