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Enron Mail |
THE HINDU BUSINESSLINE, Friday, October 19, 2001 DPC petition change allowed ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE DECCAN HERALD, Friday, October 19, 2001 HC to hear Dabhol Corp plea from Dec 11 Similar story also appeared in the following publications: THE INDIAN EXPRESS, Friday, October 19, 2001 HC to hear DPC's plea THE TIMES OF INDIA, Friday, October 19, 2001 HC to hear DPC's plea=20 THE FINANCIAL EXPRESS, Friday, October 19, 2001 Bombay HC to look into MERC's jurisdiction in DPC row on Dec 11 BUSINESS STANDARD, Friday, October 19, 2001 High court to hear DPC petition on December 11 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU BUSINESS LINE, Friday, October 19, 2001 Maharashtra cautioned on Dabhol stand-off ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE INDIAN EXPRESS, Friday, October 19, 2001 ICRA downgrades MSEB over Dabhol fracas ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU BUSINESS LINE, Friday, October 19, 2001 'SCI can invest more in Greenfield', P. Manoj=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE TIMES OF INDIA, Friday, October 19, 2001 Enron Q3 net loss at $618m=20 Similar story also appeared in the following publications: THE FINANCIAL EXPRESS, Friday, October 19, 2001 Enron Q3 net loss at $618 million ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU, Friday, October 19, 2001 Deshmukh Govt. completes a difficult two years, Mahesh Vijapurkar=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU BUSINESSLINE, Friday, October 19, 2001 DPC petition change allowed A division bench of the Mumbai High Court today allowed amendments to the D= abhol Power Company's (DPC) petition alleging bias in the Maharashtra Elect= ricity Regulatory Commission (MERC). The two-judge bench headed by Mr Justi= ce A.P. Shah posted the matter for hearing on December 11. DPC had moved th= e court saying that MERC does not have jurisdiction over disputes between i= t and the State electricity board.=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE DECCAN HERALD, Friday, October 19, 2001 HC to hear Dabhol Corp plea from Dec 11 Mumbai high court today decided to hear from December 11 a petition filed b= y Enron's Dabhol Power Company (DPC), challenging the jurisdiction of Mahar= ashtra Electricity Regulatory Commission (MERC) to adjudicate US-based mult= inational's dispute with state electricity board (MSEB) A bench headed by j= ustice Ajit Shah decided to hear the matter for a week at a stretch and all= owed MERC members Mr P Subrahmanyam and Mr Venkat Chary to be impleaded as = respondents. They have been asked to file affidavits by November nine.Anoth= er MERC member Mr Jayant Deo urged the court that he would like to recluse = himself from the proceedings as DPC had levelled allegations of bias agains= t him.The court also allowed the chamber summons moved by DPC urging for pe= rmission to amend the main petition in view of allegations of bias against = Mr Deo. The judges have asked the petitioner to carry out amendments within= a week. The court had earlier asked Mr Deo to file by September 27 his res= ponse to allegations of bias made by DPC. He filed an affidavit denying bia= s against DPC and justified his neutral stand as a MERC member.As regards t= wo intervening applications filed by US Exim Bank and a consortium of 11 of= fshore lenders of DPC, the judges had held that they would not be allowed t= o make any pleadings. However, they were permitted to assist the court by m= aking oral submissions. DPC had filed chamber summons alleging that Mr Deo = had on earlier occasions espoused views which were critical of the 2,184 MW= power project and PPA ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU BUSINESS LINE, Friday, October 19, 2001 Maharashtra cautioned on Dabhol stand-off THE financial standing of the Maharashtra Government would be certainly imp= aired if the power purchase agreement (PPA) between Dabhol Power Company an= d the State Electricity Board is not successfully renegotiated, according t= o rating agency CARE. Commenting on the State finances while rating a Rs 60= 0-crore bond issue of the Maharashtra Krishna Valley Development Corporatio= n (MKVDC), CARE said fiscal reforms assume greater urgency because the cred= it quality of the State would be impacted if there is a devolution of liabi= lities guaranteed by it in the PPA. Ballpark estimates place the size of th= e States' immediate liabilities at Rs 17,000 crore. If the worst case scena= rio is realised, the Government's liquidity position and financial flexibil= ity will be acutely impaired.=20 However, the Maharashtra State Electricity Board (MSEB), to which the asset= s would stand transferred if the State decides to take over the project, wi= ll have the option of inviting third parties to participate in the venture = minimising the State's liabilities. A CARE official said even if a third pa= rty is involved in the project, the State would have to take a sizeable hit= on capital employed. He put the loss burden on Maharashtra at around Rs 8,= 000-9,000 crore. CARE said the guarantees given by the Government to its sp= ecial purpose vehicles' borrowings have risen substantially. The total outs= tanding liabilities of Maharashtra as a proportion of the net State domesti= c product have increased to 29.1 per cent (estimated) in 2000-01 from 19 pe= r cent in 1996- 97.The State's financial position calls for fiscal consolid= ation through improvement in revenue performance and restructuring of expen= diture, it said. Meanwhile, the agency has assigned a rating of A+(SO) to t= he MKVDC issue. The long-term taxable bonds have a bullet payment at the en= d of 10 years. MKVDC has, so far, raised about Rs 1,100 crores in debt issu= es. This is the first issue in the current year. ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE INDIAN EXPRESS, Friday, October 19, 2001 ICRA downgrades MSEB over Dabhol fracas Rating agency ICRA has downgraded the rating assigned to Maharashtra State = Electricity Board's (MSEB's) bond programmes aggregating to Rs 2,015 crore,= from 'LAA-' (SO) to 'LA+' (SO). The rating has been placed under rating wa= tch. "The revised rating indicates adequate safety. The rating is based on = the unconditional and irrevocable guarantee by Government of Maharashtra (G= oM)," ICRA said. The revised rating reflects the continued uncertainty on t= he timing and likely manner of settlement of MSEB's payment dispute with Da= bhol Power Company (DPC), and its impact on the financial position of MSEB = and GoM. Though MSEB had stopped making payments to DPC, the latter had bee= n sending monthly bills to the board. DPC had recently sent the August and = September bills totalling Rs 209 crore. It had sent the bill arguing that t= he capacity payments will accrue every month. The downgrade has come at a t= ime when the High Court decided to hear from December 11 a petition filed b= y DPC challenging the jurisdiction of Maharashtra Electricity Regulatory Co= mmission (MERC) to adjudicate its dispute with MSEB. ICRA has revised the r= ating asigned to the Rs 150 crore non-convertible debenture programme of Ji= ndal Iron & Steel Company Limited (JISCO) to LA- (SO) from LAA- (SO). The r= ating has been placed under 'Rating Watch'. The revised rating indicates ad= equate safety. The rating is based and irrevocable guarantee from IFCI Limi= ted for payment of principal and interest on the debentures.=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU BUSINESS LINE, Friday, October 19, 2001 'SCI can invest more in Greenfield', P. Manoj=20 THE Shipping Ministry has no reservations on Shipping Corporation of India = (SCI) investing another $11 million as its share to bridge the $55-million = gap in the project cost of Greenfield Shipping Company. With less than a mo= nth left to take possession of the LNG tanker on the scheduled delivery dat= e of November 15, the board of SCI has not been able to take a final view o= n sinking a further $11 million in proportion to its equity holding of 20 p= er cent in the joint venture consortium. Professional members on the board = of SCI are not convinced by the arguments put forward by the company manage= ment on investing an extra $11 million and save the project from going into= payment default.. These members have counter-argued that the project has turned unviable due = to the uncertainty surrounding the Dabhol Power Company (DPC), making the p= rospect of earning the original charter hire rate of $98,600 per day look b= leak. The Shipping Ministry, which controls the SCI, feels that the State-o= wned company has no other option but to invest the additional amount of $11= million and bail out the tanker from the clutches of the lenders. ``The SC= I has two worst choices before it. One is to pump in another $11 million to= save the project from going into default and earn a return of 4 to 5 per c= ent. The second option is to refuse further investment and earn no returns = at all besides running the risk of losing its equity investment of $11 mill= ion. The SCI will have to make the best of the two worst choices,'' Governm= ent sources told Business Line.=20 While the SCI will not invest the extra $11 million immediately, it is plan= ning to issue a letter of comfort to Mitsui O.S.K.Lines, the lead partner i= n the consortium, stating that it was prepared to accept the liability in f= uture. This will pave the way for Mitsui to put in the entire $55 million t= o bridge the gap in project cost and proceed with taking delivery of the LN= G carrier. The amount given by Mitsui towards the share of the other two pa= rtners totalling $22 million ($11 million each for SCI and Atlantic Commerc= ial Inc) will be in the form of a loan. In future, this amount will have to= be reimbursed to Mitsui with interest. The Shipping Ministry feels that al= lowing bankers to confiscate the LNG vessel due to non-payment of the last = tranche of project cost of $55 million would render SCI's equity investment= of $11 million infructuous. On confiscation of the vessel, the bankers wou= ld immediately go about selling the vessel for recovering its investment of= $110 million alongwith interest which otherwise would have been paid by th= e promoters over a period of time. ``Significantly, when you approach the m= arket for selling a confiscated vessel, you won't even get the prevailing m= arket price and would have to go for a distress sale,'' the sources said.= =20 So, for an LNG tanker ordered for $220 million, the bankers would not be ab= le to realise even the prevailing price for new buildings which is hovering= at around $160 to $170 million. Consequently, the bankers will recover the= ir loan liability of $110 million with interest but the balance would be in= sufficient for the three promoters to recoup their equity investment in ful= l. ``Given this scenario, there is no point in looking at whether the extra= investment of the SCI would fetch the mandatory 12 per cent internal rate = of return as stipulated by the Government for projects involving State-fund= ing,'' the sources said. After providing $110 million for the project out o= f a total loan commitment of $165 million, the bankers led by ANZ Investmen= t Bank had suspended the last tranche of the project loan of $55 million, d= eclaring an event of default due to the controversy surrounding the project= . The promoters of Greenfield Shipping Company can now take possession of t= he tanker only on paying the remaining $55 million. The tanker is being bui= lt to ferry LNG from Oman to DPC.=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE TIMES OF INDIA, Friday, October 19, 2001 Enron Q3 net loss at $618m=20 US energy major Enron, which has decided to quit India after facing trouble= in the $2.9-billion Dabhol Power Project, on Thursday reported a $618-mill= ion net loss for the third quarter this year. Announcing the results in Hou= ston, Enron CEO Kenneth Lay said the non-recurring charges totalling $1.01 = billion after tax were recognised during the quarter which resulted in in a= net loss of $618 million. "After thorough review of our business, we have = decided to take these charges to clear away issues that have clouded the pe= rformance and earnings of our core energy business," Lay said. The company'= s total recurring net income increased to $393 million in third quarter aga= inst $292 million a year ago. "Our 26 per cent increase in recurring earnin= gs per diluted share shows the very strong results of our core and retail e= nergy businesses and our natural gas pipeline," Lay said, affirming that th= e company was on the track to continue strong earnings growth and achieve i= ts targets.( PTI )=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------ THE HINDU, Friday, October 19, 2001 Deshmukh Govt. completes a difficult two years, Mahesh Vijapurkar=20 To the Maharashtra Chief Minister, Mr. Vilasrao Deshmukh, two years of runn= ing an eight-party coalition, despite a numerically strong over-anxious Opp= osition snipping at his heels, is in itself an achievement. The arrangement= , in which the Congress(I) and the NCP are major partners, completes two ye= ars in office today. The key constituents of the Democratic Front (DF) had = actually begun to show strains of running a coalition. At one point, the NC= P, despite its mature leadership, dissociated itself from a Cabinet decisio= n on the sensitive issue of setting up a probe against the Enron deal. To i= t, the timing was inappropriate. The Congress(I) couldn't hide its glee at = the Government's discomfiture.=20 The Congress(I) too is not averse to backing out from decisions. It agreed = to the move to reconsider enforcing higher rates for water - irrigation, dr= inking, industrial and when water is a raw material, as in mineral water pr= oduction - at the coordination committee meeting of all ruling parties, bec= ause of pressure from within and from the NCP. The NCP and the Congress(I) = are aware of the limitations of coalition politics and would like to be in = the driver's seat. The two have often said it was their duty to form a part= nership to keep the BJP-Shiv Sena out of power. Or else, the State would ha= ve seen the saffron parties consolidate. Battling such odds is tough for al= l players, each with its own agenda on which they are unwilling to compromi= se. The Opposition scorns at the Government. Says Mr. Gopinath Munde, BJP l= eader: ``How can a Government backtrack on decisions like these? Can such a= Government be considered credible? I think it is all in poor taste. Disown= ing collective responsibility is unconstitutional. I am saddened at this si= tuation. This is no Government.''=20 Mr. Deshmukh says the Government is trying to limit the damage done to the = State's finances by the predecessor dispensation of the BJP and the Shiv Se= na. Once it became known that the Government was almost bankrupt, investmen= t arrivals ceased. There has been no major investment for two years. To its= credit, the Government has taken some brave decisions in two years: not pa= ying bonus to Government employees whose salary accounts for Rs. 1,300 cror= es, cutting DA, banning the SIMI despite a coalition partner's objections a= nd not budging when Enron rattled its sabre and, in fact, ceasing to buy po= wer from it. But, unfortunately, it is the inter-party rivalry that draws t= he attention of the newspapers.
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