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Enron Mail |
THE ECONOMIC TIMES, Saturday, October 27, 2001 Indian lenders to take over IFCI's exposure in DPC ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Enron fires finance director Similar story also appeared in the following publication: THE TIMES OF INDIA, Friday, October 26, 2001 Enron ousts finance officer ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Reliance shelves LNG project, Anto T Joseph=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Trouble in Enron drives online energy trade to the edge, Gelu Sulugiuc=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001=20 Petronet LNG may up enhance Dahej capacity ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE TIMES OF INDIA, Saturday, October 27, 2001 Lenders to meet over Enron's Dabhol on Nov 3=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE FINANCIAL EXPRESS, Friday, October 26, 2001 Loans to DPC based on MSEB's letter of credit: Bank of America ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE TIMES OF INDIA, Friday, October 26, 2001 Enron in talks with banks over new credit line=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Indian lenders to take over IFCI's exposure in DPC =20 IDBI-led consortium of Indian lenders to Enron's Dabhol Power Company, has = agreed "in-principle" to take over IFCI's exposure in the troubled project = following expiry of the deadline given by Japanese Export Credit Agency to = encash the counter guarantees. "We have already in-principle agreed to prov= ide a counter-guarantee for the loan given by any member of the consortium,= if its capital adequacy ratio dives below the prescribed Reserve Bank of I= ndia's norm", senior IDBI official said. Last month, alarmed by DPC's defau= lt towards interest payments to its foreign and domestic lenders, JBIC had = warned its Indian counterparts that it would be compelled to encash their g= uarantees after October 26, 2001, if IFCI's exposure of Rs 454 crore was no= t covered by other FIs. "We will communicate to JBIC that after infusion of= Rs 1,000 crore by the Union government in IFCI, the FI's car will increase= to 9 per cent and trigger point has not yet arrived whereby the Japanese a= gency could encash the guarantees," the official said. He said the issue wo= uld be discussed at length at DPC's lenders meet to be held on November 2, = 2001, and three in London. "The Indian lenders will try and impress upon JB= IC that IFCI is out of danger and there is no dire need for taking over its= exposure in the present circumstances," he added. ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Enron fires finance director US energy major Enron has ousted its finance director amid an investigation= by the American government into the company's business practices. Finance = director Andrew Fastow would take a leave of absence and be replaced by Jef= frey McMahon, former treasurer, the company said. "In my continued discussi= ons with the financial community, it became clear to me that restoring inve= stor confidence would require us to replace Andy," said Enron chairman Kenn= eth Lay. Billions of dollars worth of transactions between Enron and "limit= ed partnerships" controlled by Fastow were being examined by the Securities= & Exchange Commission, a report in the Times daily said on Friday. Enron, = based in Houston, has annual revenues of more than $100 billion, and is inv= olved in a quarter of US' electricity and natural gas trades. Fastow's depa= rture follows the abrupt resignation of Jeff Skilling as chief executive in= August for "personal reasons".=20 Lay, who is thought to have played a role in US President George W Bush's d= ecision to drop the Kyoto accord on global warming, was brought out of reti= rement once again to lead Enron. Shares in Enron hit a six-year low on Wedn= esday due to the SEC investigation coupled with a $618-million third-quarte= r loss and $1-billion charge for failed investments. ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, October 27, 2001 Reliance shelves LNG project, Anto T Joseph=20 THE DABHOL imbroglio and the current uncertainty in the liquefied natural g= as market has forced the Reliance Group to put its $5-billion LNG project o= n the backburner.=20 The petroleum and petrochemicals major had signed an MoU in February 2001 w= ith British Petroleum and National Iranian Oil Company, for an eight-millio= n tonne per annum LNG project. The decision to slow down implementation of = the LNG project is believed to have taken after the Reliance-BP-NIOC consor= tium completed a feasibility study for the proposed project.=20 Reliance and BP would hold a 25 per cent stake each in the project, and the= remaining stake will be with NIOC if and when the project is implemented. = A Reliance spokesperson, however, said the company was going ahead with the= project. The Reliance gameplan was to upgrade capacity at its Jamnagar ter= minal. The Jamnagar port is ideally equipped to handle LNG as there is no n= eed for building costly breakwater and dredging facilities, which makes LNG= handling much more economical and competitive.=20 The proposed project is the largest so far in India and a whole network con= sisting of the liquefaction plant, regassification plant, LNG terminal and = transportation facilities was supposed to come up.=20 Sources said Reliance was finding it difficult to put in place contracts an= d agreements because of the lack of potential end users.=20 "After Enron's Dabhol Power Company ran into a severe payment crisis, in th= e process exposing the unviability of LNG as an alternate fuel for base loa= d plant, India is unlikely to see setting up of any LNG-based projects. Man= y LNG players i who have already executing their projects, but have suddenl= y found themselves saddled with many problems," said an industry source.=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001 Trouble in Enron drives online energy trade to the edge, Gelu Sulugiuc=20 ENRON almost daily revelations of fresh troubles has prompted concerns its = powerful position in online energy trading could prompt a credit crunch and= rock the fast-growing industry. Though experts said yesterday that EnronOn= line, Enron's Web trading platform, should survive, investors are skittish = about the No 1 US natural gas and electricity marketer.=20 Since last week Enron has shed more than $13 billion in market value as sha= res plunged, forcing it on Wednesday to replace its chief financial officer= , who was linked to transactions now under investigation by government regu= lators.=20 In the latest blow, credit rating agency Fitch yesterday placed Enron debt = securities on negative credit watch, saying the erosion of investor confide= nce, if unabated, would impair the company's access to capital markets.=20 "We put them on a list of concerns two months ago and made sure our books w= ere balanced just as the first stage of precaution," said one energy trader= active on EnronOnline. About 60 per cent of all transactions by Enron are = captured through EnronOnline, and so far traders have kept faith.=20 On Wednesday, EnronOnline - in which trades always involve Enron as either = the buyer or seller - conducted 8,000 transactions through its site, with a= notional value of $4 billion, more than daily its average of $3.5 billion.= =20 "People are transacting at higher levels as they prepare their portfolios f= or the winter and to protect themselves from price volatility," said Vance = Meyer, an Enron spokesman.=20 Not even Enron itself anticipated the success of EnronOnline, which enjoys = the highest volume of any platform in the cut-throat field of Internet ener= gy trade. Initially, the company set a yearly trading volume target of $30 = billion to 40 billion - business it now does in 10 days alone.=20 Yet traders worry Enron's spectacular fall from grace could make it a less = solid counterparty in certain eyes after transactions with two limited part= erships run by Andrew Fastow sparked investigations by the US Securities an= d Exchange Commission. Enron replaced Fastow as its CFE on Wednesday in the= hope it would restore investor confidence.=20 "I haven't seen any sign of them slowing down or not making a good market o= n EnronOnline, but until things get squared away, I will keep a tight leash= on the credit issue," one trader said. "The only thing that bothers me is = it takes a lot of capital to do what they're doing, and with the stock pric= e down, I wonder how much credit they have left," he added.=20 Enron said this week that it can tap a $3.35 billion credit line to support= its trading and marketing business, which can experience wide swings in ca= sh flow depending on commodity prices.=20 "In the event of a 'push-comes-to-shove' liquidity crunch, we believe the c= ompany could generate substantial cash by selling a variety of other assets= ," said Ron Barone, an analyst at UBS Warburg.=20 If EnronOnline does lose steam, the big winner will be its main rival Atlan= ta-based Intercontinental Exchange (ICE) - which already routinely trades m= ore than $1 billion a day. "This (recent news) shows there may be some kink= s in the armor and some people may stop using EnronOnline," said Kyle Coope= r, analyst at Salomon Smith Barney. "Clearly ICE could benefit or any other= alternative online platform."=20 EnronOnline is still a force to be reckoned with, experts said. "Enron clea= rly will survive and EnronOnline will still remain a dominant force" in Int= ernet energy trading, said Barone. Nonetheless, traders are playing it safe= . (Reuters ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE ECONOMIC TIMES, Saturday, October 27, 2001=20 Petronet LNG may up enhance Dahej capacity PETRONET LNG, a joint venture of four public sector oil and gas majors, is = considering doubling the capacity of its under-construction Dahej liquefied= natural gas terminal in Gujarat to 10 million tonnes.=20 "We are considering a proposal of doubling the present 5 million tonnes cap= acity of Dahej terminal as we see tremendous demand in the future," said Su= resh Mathur, chief executive officer and managing director, Petronet LNG.= =20 While the subject is under study, Petronet LNG will firm up plans once the = Dahej terminal nears completion. A joint venture of Oil & Natural Gas Corpo= ration, Gas Authority of India, Bharat Petroleum and IndianOil, Petronet LN= G is planning another terminal of 2.5 million tonnes capacity at Kochi in K= erala.=20 French gas major Gaz de France and RasGas of Qatar, which will supply LNG t= o the terminals for a 25-year period beginning 2003, also hold equity stake= in the Petronet LNG. The Dahej project involves the construction of a rega= sification terminal, a liquefaction train in Qatar to be built by RasGas an= d two methane tankers. A consortium led by Ishikawajima-Harima Heavy Indust= ries of Japan is executing the $317-million engineering, procurement and co= nstruction contract at Dahej.=20 Work on the Dahej terminal, expected to begin operation by December 2003, w= as progressing on schedule and on cost, said Mathur. "Around 2,000 people h= ave been mobilised for the construction of the jetty and storage tanks."=20 The capacity enhancement would involve construction on an additional storag= e tank with an investment of around $70 million. While Petronet LNG has the= option to acquire the 5-million-tonne capacity Dhabol LNG terminal of US e= nergy major Enron Corporation, Mathur denied there were any such plan.=20 Enron's LNG terminal at Dabhol was set up to supply regassified LNG to Dabh= ol Power Corporation for use in its power plant, and the remainder to other= bulk users. In the wake of the tussle over power dues with Maharashtra Sta= te Electric Board, one of the partners in Dabhol Power, Enron is trying to = sell off both projects.=20 Indian consumption of natural gas has risen faster than any other fuel in r= ecent years. From only 0.6 trillion cubic feet per year in 1995, natural ga= s use was nearly 0.8 Tcf in 1999 and is projected to reach 1.3 Tcf in 2005 = and 1.8 Tcf in 2010.=20 With domestic gas production far short of demand, India is encouraging proj= ects for import of LNG. The government is of the view that the dozen or so = terminal projects in the pipeline would be able to meet the needs of gas-fi= red electric power plants and bring down the cost of power generation. (IAN= S)=20 ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE TIMES OF INDIA, Saturday, October 27, 2001 Lenders to meet over Enron's Dabhol on Nov 3=20 Lenders to power plant in India majority owned by Enron have called a meet= ing next week in London to discuss ways of reviving the beleaguered project= , a banking source said on Saturday. They will examine offers that two Indi= an companies have put forward for buying the US energy giant's 65 per cent = stake, and those of two other US firms, in Dabhol Power Company, which is b= uilding the controversial project, the source said. The meeting of lenders, who include multinational banks such as Citibank, B= ank of America, will be held on November 3, the source added. At stake is n= ot just the fate of the $2.9 billion, 2,184 MW project, which is India's la= rgest foreign direct investment, but also the over $600 million investment = of Enron, General Electric and Bechtel. All three companies are founders of= DPC, which in 1995 got permission from India's Maharashtra state governmen= t to set up the plant on its coast. The plant's first phase of 740 MW was completed in 1999, but work on the se= cond phase of 1,444 MW, which is 97 per cent complete, was abruptly stopped= in June this year following a blazing row with cash-strapped state utility= MSEB. MSEB, which agreed in 1995 to take the plant's entire output, said it can n= o longer do so because Dabhol's power is too costly. Dabhol, in turn, accus= ed MSEB of defaulting on its monthly payments and served a preliminary noti= ce to terminate the power purchase contract. Under this notice, both companies are given six months time to settle the m= atter through negotiations. If talks fail, Dabhol has the right to issue a = final termination notice and take the matter to arbitration in London. That= six month period expires on November 19. Houston-based Enron, which owns 65 per cent of Dabhol, further announced th= at it intends to exit the project and offered to sell its equity to the Ind= ian government. TIME RUNNING OUT The Business Standard newspaper reported that next week's meeting would als= o discuss a request by Dabhol to finally terminate the contract after Novem= ber 19. "It is one of the items on the agenda," the paper quoted a senior banker as= saying. The paper said once Dabhol serves the final notice, the matter pro= ceeds to arbitration, which would not help India. "The widespread view amon= g the government and lenders is that in such a situation DPC will win hands= down," the paper added. A Dabhol spokesman could not be contacted immediately. The source said the = meeting would review the progress made in resolving the dispute so far. The Indian government has not responded to Enron's offer to buy its equity,= but two Indian companies, BSES and Tata Power, have shown interest. They = have agreed to take over the project if the cost is reduced, and if the fou= nders agree to sell their stake at a discount. Local business daily, the Economic Times reported on Friday that Tata Power= and BSES are willing to pay the founders $450-$600 million for the 85 per = cent stake held by Enron, GE and Bechtel. Enron has rejected the offer and is not ready to settle for anything less t= han $1 billion, the paper added. Officials of Tata Power and BSES were not = immediately available for comment.( REUTERS ) ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= -----------=20 THE FINANCIAL EXPRESS, Friday, October 26, 2001 Loans to DPC based on MSEB's letter of credit: Bank of America =20 Bank of America (BoA), which is the onshore trustee for the secured parties= of Dabhol Power Company (DPC), in an application before the Supreme Court,= has said that the secured lenders in making their loans to the "distressed= " 2,184 mw Dabhol project has relied on the validity of the letter of credi= t (L/C) established by the Maharashtra State Electricity Board (MSEB) and t= he non-payment under the L/C would inevitably result in non-payment of the = lender's debt. The trustee submitted that "had the secured lenders known th= at the MSEB would seek to prevent the honouring of the L/C, they would not = have made the loans to the project."=20 The BoA in its application has appealed to the Supreme Court (SC) to implea= d it as a respondent in the special leave petition (SLP) filed by the MSEB = on September 17 challenging the Mumbai High Court allowing the DPC to invok= e the L/C of Rs 136 crore for the recovery of the April bill from MSEB. The= BoA has prayed that the SC should dismiss the MSEB's SLP and also vacate i= ts (Supreme Court) order of September 21 staying the Mumbai High Court orde= r. The BoA has pooh-poohed MSEB's argument that it would suffer irreparable= harm if payment under the L/C was made. "The trustee respectfully submits = that harm to MSEB is not a relevant consideration to the payment by Canara = Bank to the trustee under the L/C which is a separate contract made and ass= igned before the controversy arose between the MSEB and DPC."=20 The BoA has reiterated its plea that the SC, which would hold a hearing on = November 2, should dismiss MSEB's SLP and grant interim relief as it would = be directly affected by any order passed by the apex court. In this case, t= he trustee as beneficiary has sought to draw funds (Rs 136 crore) payable t= o it under the irrevocable L/C dated May 12, 1999 and signed by Canara Bank= , which has not disputed its obligation to pay. The Mumbai High Court in it= s September 14 order properly determined that under settled principles of I= ndian law governing L/C, no injunction can be issued absent "extraordinary = circumstances that require clear proof by the beneficiary and knowledge of = clear fraud by the issuing bank." ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------=20 THE TIMES OF INDIA, Friday, October 26, 2001 Enron in talks with banks over new credit line=20 NEW YORK: Enron Corp, which has been seeking to curb fears that it faces a = credit crunch, is talking to its banks about a new, multi-billion-dollar cr= edit line, the Wall Street Journal online edition reported on Friday. The report comes after Enron said on late Thursday that it had drawn on its= committed lines of credit to provide more than $ 1 billion in cash liquidi= ty. The Journal said the company had drawn down about $3 billion, the major= ity of its available bank credit lines. The Journal said on Friday that the company will use most of the money draw= n from its credit lines to offer to redeem about $1.85 billion of outstandi= ng commercial paper. Enron CFO Jef McMahon said in a statement on Thursday that the decision to = draw on the credit lines was designed to alleviate concerns about the compa= ny's liquidity. On Wednesday, Enron was forced to replace its former CFO, Andrew Fastow, wh= o was linked to transactions now under investigation by government regulato= rs. There have been disclosures that the company did off-the-balance sheet = transactions with two limited partnerships run by Fastow in deals the SEC i= s now looking into for possible conflict of interest.( REUTERS ) ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ---------------------------------------------------------------------------= ------------
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