The first meeting between the domestic and foreign lenders of the beleaguered Dabhol Power Company after the Manmohan Singh government assumed office remained inconclusive. The lenders are likely to meet again on Friday.
"The two sides made progress in the discussions but no final decision has been made. They will in all probability meet on Friday," sources familiar with the development said.
The meeting was also attended by the United States government agency the Overseas Private Investment Corporation, which has the twin role of lender and political insurer in the project.
The Mumbai meeting is the third in about the last one and a half months following the ones in Singapore and London.
Domestic lenders led by the Industrial Development Bank of India, which have an exposure of around Rs 6,300 crore (Rs 63 billion) to the project, are trying to buy out the foreign lenders exposure of around $ 372 million at a substantial discount.
The domestic lenders are keen on buying out the foreign lenders exposure at a 40 per cent discount at the last count, while the foreign lenders are not keen on settling for anything more than a 30 per cent discount.
The hectic efforts to find a solution comes in the face of General Electric and Bechtel acquiring the bankrupt US company Enron Corp's 65 per cent stake in the Dabhol Power Company through a complex three tiered transaction.
The stake in DPC is however pledged with the lenders which also have the first charge on the assets.
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