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DPC will not attend Singapore meet: Wade Cline

As an immediate aftermath to IDBI led Indian financial institutions' action of filing a suit against Enron's Dabhol Power Company, the energy major has decided to 'boycott' the two-day lenders' meet to be held in Singapore starting Thursday.

"DPC will not attend the Singapore meet following the legal course preferred by the IFIs (Indian financial institutes), which has put in jeopardy the negotiation meetings convened by them to discuss the purchase of foreign sponsor's equity by them," DPC managing director K Wade Cline said in Bombay on Wednesday.

In a communication to IDBI chairman P P Vora and ICICI executive director S Mukherji, he said the legal action by IFIs was an effort to prevent DPC's foreign investors both debt and equity, from exercising their previously agreed contractual rights.

on Tuesday, the IFI consortium comprising IDBI, ICICI, IFCI and State Bank of India filed a suit in Bombay high court against DPC, its estranged partner MSEB, the Government of Maharashtra and the Centre, preventing the multinational from initiating a final termination notice to be served on MSEB.

The lenders have also asked DPC to commence the 740-mw phase one of the project immediately.

"This legal action has sealed any possibility of arriving at an amicable solution in the Singapore meet," Cline said.

He said, DPC was amazed at the IFIs' move to file the suit when they and the Centre had specifically requested meetings with us in Singapore and Washington DC to discuss an 'amicable' solution of the Dabhol issue.

Cline said DPC views IFIs legal recourse as a precipitous step clearly designed to frustrate the energy major and its stakeholders' ability to pursue legal remedies under the power purchase agreement.

"In the past, we have experienced similar delaying tactics from the Maharashtra Government, but we did not expect that the Central Government owned and directed FIs will take such an action intended to undermine the legitimate interests of the foreign investors," the Cline added.

Expressing scepticism over the proposed Singapore meet, Cline said the company's out of turn co-operation to attend the meet was despite knowing the fact that the meeting was 'not likely to lead anyone closer to a solution'.

The Singapore meeting was crucial as representatives of DPC's potential buyers, Tata Power Company and BSES Ltd, were to commence negotiations for the sale.

DPC has agreed to take a 30 per cent hit in its equity to $850 million, however, the Tatas are demanding a 50 per cent reduction in the said equity at $600 million.

On November 5, the troubled DPC had served a transfer of notice asset to MSEB, kicking off the process for issuance of the final termination notice and also the valuation of the plant.

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