DPC bidders approach IDBI for IoM
By Praveen Chandran | 16 Mar 2002
Mumbai: The bidders for the 85-per cent stake of Enron, Bechtel and GE in the beleaguered Dabhol Power Company (DPC) are to approach the Industrial Development Bank of India (IDBI) seeking the information of memorandum (IoM) on the DPC plant.
“We need the IoM on the 2,184-mw DPC plant. Since we have submitted the expression of interest with IDBI, the financial institution has a moral responsibility to furnish the IoM to the bidders,“ says a top official with a qualified bidder.
The IoM provides a detailed description on the current status of the plant; it is considered as one of the important documents for the DPC bidders in conducting the due diligence of the plant. An official says it will take another two-to-three months for IDBI to prepare a detailed IoM, due to the complexity of the project. “We feel the DPC bidding process will continue at least for the next four-to-five months.“
The official says the bidders are also actively planning to claim the refund of the earnest money of $1,00,000 paid to DPC at the time of submission of the EoI to IDBI. The contenders have already expressed serious displeasure over the ongoing tiff between the lenders and the sponsors of DPC over various issues, which, the official says, have been causing delays in carrying out the due diligence.
The due diligence was to start from the first week of March 2002. Tata Power, BSES, Reliance, Gail, Shell, British Gas and Gas de France have deposited $1,00,000 each as demanded by DPC at the time of submitting the EoI on 7 February to IDBI.
The official says the DPC plant, which is lying unattended and abandoned for the past 10 months, has gone from bad to worse. The care and preservation (C&P) fund for the plant, put together by offshore sponsors, has completely been exhausted a few months back.
Though the lenders had promised a further line-of-credit to the C&P fund, it subsequently turned down the offer, following differences with the offshore equity holders. Most of the regasifcation plant and terminal at DPC is fast rusting and the equipment are unlikely to live through another monsoon, the official says.