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Enron Mail |
FYI
-----Original Message----- From: Walls Jr., Rob=20 Sent: Tuesday, October 30, 2001 8:57 AM To: Derrick Jr., James Subject: FW: Economic Times article: FIs may take over Enron for $700-800m =20 -----Original Message-----=20 From: Ambler, John=20 Sent: Tue 10/30/2001 8:52 AM=20 To: Horton, Stanley; Hughes, James A.; Walls Jr., Rob; Lundstrom, Bruce=20 Cc: Kean, Steven J.; Palmer, Mark A. (PR); Denne, Karen; Mayeux, Gay; Cline= , Wade=20 Subject: FW: Economic Times article: FIs may take over Enron for $700-800m FYI, the Economic Times in India has published the following article, which= suggests details of a DPC buy-out. While this article does not accurately= reflect the reception Wade Cline has been receiving in Delhi, it may be a = trial balloon by the Prime Minister's office to gauge public reaction. Dow= Jones has already carried a shortened version of the story, a copy of whic= h appears at the bottom of this e-mail. We are using the following stateme= nt to respond to media inquiries: Media Statement=20 DPC continues to hold discussions with GoI /IFI's regarding the sale of for= eign sponsor equity in the Dabhol project. It would not be appropriate to e= laborate further on the recurring media speculation with respect to the sta= tus of these buyout discussions.=20 While we remain hopeful for an amicable resolution of this issue, DPC conti= nues to pursue the available legal remedies under the contract documents in= order to protect the interests of DPC's stakeholders. =20 ECONOMIC TIMES, Tuesday, October 30, 2001=20 Enron nears deal to sell DPC to IFI's at 30% discount=20 IFIs may take over Enron for $700-800m, Shubhrangshu Roy=20 US power giant Enron is in advanced stages of negotiations to dispose of it= s controversial Indian venture Dabhol Power Company at a 30 per cent discou= nt to the financial institutions at a price of $700-800 million.=20 Enron and the FIs, led by the Industrial Development Bank of India, are sai= d to be close to finalising a broad agreement to this effect in the next fe= w days. The final settlement should be worked out before Prime Minister Ata= l Bihari Vajpayee leaves for the US in the second week of November. Should = the deal go through, Enron is likely to settle for a five-year payment plan= in equal instalments to minimise a heavy one-time foreign exchange outgo. = Enron claims its financial exposure in DPC is over $1 billion. It had earli= er insisted that it be paid this sum for any out-of-court settlement and to= enable its exit from India. Now it is likely to settle for a lesser amount= , that is in the excess of $700 million, but definitely lower than $800 mil= lion, which is its actual equity exposure in DPC. Sources close to the ongo= ing negotiations say that the government is eager that the FIs take over DP= C quickly so that the Prime Minister can tell US President George W Bush du= ring his forthcoming visit to Washington that justice has been done to the = power major.=20 Enron chairman Kenneth Lay, known to be close to the US President, was the = biggest donor to Bush's campaign kitty. A settlement of the Enron imbroglio= , being played out since early this year, is seen to be important to enhanc= ing India's political relationship with the US. The government is keen that= the FIs take over DPC to avoid prolonged negotiations on a settlement that= would be necessary if a private Indian promoter were to step in. So far, B= SES and Tata Power have evinced interest in taking over DPC, but their offe= r prices are said to be too low. The FIs, on the other hand, are keen on an= early settlement as they have a huge loan exposure of over Rs 6,200 crore.= Should the FIs take over the company, they are expected to warehouse the p= roject before selling it to a private buyer. This is expected to take at le= ast 90 days.=20 Any prospective private sector buyer would need at least a month to underta= ke a proper due diligence of DPC's accounts. Thereafter, the FIs could take= at least another 30 days to make an open offer and another month to close = the sale with a private bidder or the State-owned National Thermal Power Co= rporation.=20 Sources say of the $1-billion-plus exposure claimed by Enron in DPC, Enron'= s equity exposure -- along with its US partners GE and Bechtel -- is $800 m= illion. The company also claims to have spent around $200 million as "devel= opment expenditure" and around $140 million by way of retained earnings. ___________________________________________________________________________= =20 NEW DELHI -(Dow Jones)- U.S. energy company Enron Corp. (ENE) is in an adva= nced stage of negotiations to sell its Indian unit, Dabhol Power Co., at a = 30% discount to financial institutions at a price likely between $700 milli= on-$800 million, reports the Economic Times, quoting unnamed sources.=20 The business daily says Enron and the financial institutions, led by the In= dustrial Development Bank of India (P.IDB), are close to finalizing a broad= agreement within the next few days. The final settlement should be worked = out before Indian Prime Minister Atal Bihari Vajpayee leaves for the U.S. i= n the second week of November, according to the report. Should the deal go through, Enron is likely to settle for a five-year payme= nt plan in equal instalments to minimize a heavy one-time foreign exchange = transfer, says the report.=20 Dabhol is a 2,184-megawatt power project located in the western Indian stat= e of Maharashtra. Enron holds a 65% stake in DPC. Costing $2.9 billion, the= project is the single largest foreign investment in India to date.=20 Newspaper Web site: www.economictimes.com=20 -By Himendra Kumar; Dow Jones Newswires; 91-11-461-9426; himendra.kumar@dow= jones.com
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