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April 6, 2001
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Money > Business Headlines > Report April 6, 2001 |
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Lenders of Dabhol Power to meet next weekS Ravindran The lenders of the $3 billion Dabhol Power Company in Maharashtra will meet next week following the fresh stand-off between the power company and the Union government. Dabhol Power served a notice of arbitration to the Centre on Wednesday after the latter refused to honour the counter-guarantee for the Rs 1.02 billion bill for December 2000. "This is a serious development as there seems to be a hardening of positions on both sides. Lenders would ideally like the two sides to adopt a more conciliatory attitude," said a senior institutional official closely involved with the lenders' consortium. Sources pointed out that domestic lenders, who have committed a rupee loan of $333 million for the $1.86 billion second phase of the project, as well as various foreign lenders would like to meet immediately. However, the meeting is now likely to take place only next week in view of the holidays for banks and financial institutions this week. "There is no question of recalling the loans or stopping further disbursement. This makes no sense at this point as this will now only derail the project. The interest of the lenders cannot be served by such a move," sources added. The bulk of the $333 million rupee loan has been sanctioned by the Industrial Development Bank of India. The State Bank of India has sanctioned $175 million, while the Canara Bank contributed $25 million. IFCI has an exposure of $25 million in terms of both loans and deferred payment guarantee. The clutch of foreign banks participating in the financing of the 2184 mw project include J-Exim of Japan, Miti Japan and Overseas Private Investment Corporation. The global co-ordinators to the loan include ABN Amro, CSFB, ANZ Grindlays, SBI and Citibank. Lenders have already disbursed at least 80 per cent of the $1.2 billion debt to the 1,444-mw second phase of the project which is in an advanced phase of completion. The 740-mw first phase is already operational. The lenders had met once before in New York on January 9, 2001, when the Maharashtra State Electricity Board had defaulted on its payments for October. The crisis was then defused when the Maharashtra government released Rs 1.14 billion towards the amount due. Powered by ALSO READ:
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