The Hindu Business Line : Dabhol lenders' talks remain inconclusive

TALKS between Dabhol Power Company's (DPC) Indian and foreign lenders over the price at which the former will buy out dollar-denominated loans remained inconclusive for the second day in a row on Friday.

The Indian lenders will meet the foreign lenders again on June 24, a source close to the negotiations said.

Both parties will wait and watch developments in a London court where GE and Bechtel, who own 85 per cent of DPC, have initiated arbitration against the Government of India alleging violation of the bilateral treaty between India and Mauritius.

The arbitration has been launched by Capital India Power Mauritius, a GE subsidiary, and Bechtel-owned Energy Enterprise Mauritius Co.

The companies have contended that the dispute between DPC and its customer, Maharashtra State Electricity Board (MSEB), led to loss of business for them and the dues towards power supply bills be recovered from the Government of India.

According to the source, today the lenders were unable to reach a consensus on converting the price at which Indian lenders would take over the $350-million loans (Dabhol's erstwhile suppliers' credit that was converted into dollar loans).

While the IDBI-led Indian lenders wanted foreign banks and the US Government's arm, Overseas Private Investment Corporation, to take a 30 per cent and 60 per cent hit each on phase I and phase II loans, the foreign lenders said that they were willing to accept roughly 49 per cent hit for both phases, the source said.

Today's meeting was the third in as many months. The lenders met in Singapore in April and at London in May. Indian lenders including IDBI, ICICI, SBI and Canara Bank have an exposure of Rs 6,200 crore to the 2,184 MW power plant and LNG project.