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RIL, Tata, BSES among eight bidders for DPC pie

In an unexpected move, Reliance Industries Ltd and British Gas Plc on Thursday joined the race for buying stake in the troubled Dabhol Power Company, taking the final tally of domestic and international bidders to eight.

"Both Reliance and British Gas were the last moment contenders as they submitted their expression of interest just before the 1700 IST deadline on Thursday," a senior financial institution source said in Mumbai.

With the two new entrants, the companies which have emerged as potential bidders are Tata Power Company, BSES Ltd, Gas Authority of India Ltd, and global energy giants Royal Dutch Shell, Totalfina Elf and Gaz de France.

When contacted TPC managing director Adi Engineer and top Shell officials declined to comment on the matter saying that the matter was highly confidential, while BSES chairman and managing director R V Shahi confirmed signing the agreement.

"BSES signed the confidentiality agreement two days ago and we expect to commence due diligence by mid-next week. The process would be undertaken by in-house experts at the data room to be provided by DPC in London," Shahi said.

Gaz de France, which has mandated a Navi Mumbai based firm Logicon Engineers Pvt Ltd to negotiate their interest, would sign the agreement early next week, FI sources said.

However, no confirmation was available on another energy giant Totalfina Elf's participation in the buyout process.

Logicon Engineers managing director Balachandran said, "We have submitted our expression of interest to IDBI and will complete the modalities like paying $100,000 and probably sign the agreement by Feb 11 or Feb 13."

Thursday was the last day for submitting EoIs.

Balachandran said a team of experts representing Gaz de France would visit the data room from Paris itself.

"We are looking towards the project in great detail and are of the opinion that the LNG contracts would have to be reworked. Unless that is achieved it is not possible to bring down the cost of power," he said.

He also confirmed that Gaz de France had initiated talks with TPC and BSES for a potential partnership for taking over the 2,814 mw idle power plant.

FI sources said all the five companies had submitted EoIs separately and also qualified for the bidding process with a minimum net worth of $200 million and requisite experience in managing and operating both the power and liquified natural gas plants.

In case of multiple bids, DPC, which is the ultimate decision making authority, would shortlist the parties based on their EoIs for taking up the process of due diligence, they added.

"The schedule for the entire due diligence process would be decided by DPC after the money is deposited with the financial institution," sources added.

FIs have an exposure of over Rs 62 billion in the Enron-promoted project and has over Rs 50 billion credit locked in it.

Houston-based bankrupt Enron Corp currently holds a majority 65 per cent stake in the project while 15 per cent is with the Maharashtra State Electricity Board. The remaining 20 per cent rests equally with Bechtel and GE.

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