Financial Daily from THE HINDU group of publications
Wednesday, Feb 19, 2003
Financial Daily from THE HINDU group of publications Wednesday, Feb 19, 2003 |
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Corporate
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Mergers & Acquisitions GE, Bechtel close to acquiring Enron stake in Dabhol Our Bureau
NEW DELHI, Feb. 18 POWER equipment majors and equity holders in the Dabhol power project, General Electric (GE) and Bechtel, are close to acquiring Enron's equity 65 per cent in Dabhol Power Company (DPC). GE and Bechtel, which have 10 per cent equity apiece in DPC, have informed the Government that they have signed a letter of intent (LoI) with Enron and Overseas Private Investment Corporation (OPIC), a lender and project insurer, to this effect. The equity purchase by GE and Bechtel is contingent on the Government retaining its `counter guarantee' cover for the Dabhol project post equity sale when Enron will have no equity in the project, the two companies have informed the Finance Ministry. The present counter guarantee is valid only if Enron maintains a 26 per cent stake in the project. As per the counter guarantee cover, in case the power purchaser, the Maharashtra State Electricity Board (MSEB), does not honour DPC's bills for a week, DPC can invoke the Central guarantee and obtain payments totalling up to Rs 1,500 crore.
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