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Enron, GE, Bechtel may not sell stake if amount goes to TRA

Enron, GE and Bechtel, the three foreign promoters of Dabhol Power Company, could decide against selling their 85 per cent stake in the project if the proceeds of the company's proposed sale are not paid to them and instead forwarded to a Trust and Retention Account.

"All the three companies have unanimously opposed the domestic and international lenders' proposal. This could stall the due diligence process. If the lenders do not change their decision, the offshore companies may not be interested in participating in the sale, dumping the project in entirety," financial institutions sources said in Mumbai on Tuesday.

The Industrial Development Bank of India and US-based Overseas Private Investment Corporation have decided that the proceeds of DPC sale would be deposited in a TRA. After which they would transfer their portion of loans to themselves and the remaining would go to the sponsors.

The DPC promoters' approach could be understood in the light of the fact that the company is now left with less than $8 million in its account for further sustenance, and the lenders have not even disbursed the sanctioned $1.7 million to DPC as due diligence Budget.

"Both the due diligence Budget and care and preservation amount is yet to be given in hands of DPC," sources admitted.

Interestingly, the lenders' decision to transfer the sale amount to TRA comes in the wake of potential bidders' consistent questions as to who would be the recipient of the sale money.

Meanwhile, the seven companies that have submitted expression of interests for DPC are still awaiting information from IDBI for carrying out the due-diligence.

But, given the inordinate delays in even finalising the process some of them appear to be losing interest in the sale.

"We do not know what is happenning? Who the recipients of the amount are? With so much of sloppiness we think that the value of equity is nearly zero," said a high ranking official from one of the global energy majors, which is interested in the project.

He complained that IDBI has not even communicated the proceedings of the last month's two-day Singapore meeting to the interested parties

"Frankly this process has no meaning at all. If IDBI is taking more than three months to finalise the due diligence process, how does it expect us to complete the practice in a matter of four to six days," the official said.

Seven companies including Tata Power Company, BSES Ltd, Gas Authority of India Ltd, Reliance Industries Ltd, Royal Dutch Shell, British Gas India and Gaz de France have given their expression of interest for DPC.

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