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Indian lenders to Enron Corp.’s controversial $2.9 billion Dabhol power plant hope to persuade a Mumbai court to block a move by the failed energy trader to bring the project under bankruptcy protection under U.S. laws, throwing into a tailspin the sale of a crucial overseas asset of the Houston-based corporation. P P Vora, chairman of Dabhol’s lead creditor, Industrial Development Bank of India, said on Thursday that he had received a letter from Enron’s creditors’ committee in the United States asking for all matters relating to the Dabhol sale to be transferred to a New York court. “We are asking the Bombay High Court to treat this as untenable, and null and void,” said Vora. The Mumbai court, however, has yet to accept IDBI’s plea or set a date for hearing the case. Enron late Wednesday said three units holding its 65 percent equity stake in the gas-fired power plant, now shut down at Dabhol on India’s west coast about 150 miles south of Mumbai, filed for Chapter 11 protection in the United States. The plant was not included in the Houston company’s December bankruptcy filing and subsequent addition of assets for protection. The three subsidiaries are Offshore Power Production CV, Enron India Holdings Ltd. and Enron Mauritius Co., bringing the number of units that have filed for protection to 57. By including the subsidiaries in its bankruptcy case, Enron will likely have more control over how its share of the Dabhol plant is sold. IDBI, which has lent over two-thirds of the nearly $1.4 billion debt extended to Enron subsidiary Dabhol Power Co., was orchestrating the sale of the 65 percent equity owned by Enron and the 20 percent held equally by General Electric Co. of Fairfield, Conn., and construction group Bechtel Corp. of San Francisco. The Maharashtra State Electricity Board, a utility owned by the western Indian state of Maharashtra, owns the remaining 15 percent not for sale. The Chapter 11 filing in the United States and the countersuit in Indian courts will adversely hit IDBI and other Indian creditors, such as the State Bank of India, which wanted the sale completed March 31 — the end of the Indian financial year. If interest on their $1.4 billion in direct loans and $500 million in guarantees is not received before the end of March, IDBI and SBI will have to provide for substantial charges on their books for the unpaid interest and loans. The sale had already run into rough weather earlier this month after differences arose between, on one side, Enron and its two U.S. partners in the Dabhol project, and on the other, Indian lenders to the project and potential buyers. The dispute: How to split the proceeds of the sale. The lenders want overdue interest payments, money for maintenance of the rusting plant and costs of the sale to be covered first before the sellers get their share. The company has defaulted on interest payments on foreign currency loans and is likely to miss paying the next tranche of interest and capital repayments to Indian lenders due March 31. The new legal tangle also complicates plans of seven bidders for the Dabhol assets, who were hoping to land a bargain. The three foreign bidders include the U.K.’s BG, France’s state-owned Gaz de France and Anglo-Dutch oil company Royal Dutch/Shell Group. The remaining four are Indian companies: petroleum-to-textiles giant Reliance Industries; conglomerate the Tata Group; BSES Ltd., the electricity supplier to most of Mumbai; and state-run gas marketer Gas Authority of India Ltd. French oil giant TotalFinaElf SA had initially expressed interest in the sale, but dropped out. Handling the sale for Dabol’s creditor banks are: NM Rothschild & Sons India Pvt Ltd.; DSP-Merrill Lynch Ltd., a 40-60 joint venture between Merrill Lynch & Co. and DSP Financial Consultants; and Stuart & Mackertich Investment & Financial Services Ltd . The 2,184 megawatt Dabhol power project, the largest LNG-fired plant in the world, has been controversial from its inception in the early 1990s. The 740-megawatt first phase started operating in May 1999. The 1,444-megawatt second phase was nearly complete when construction was halted because its sole customer, the nearly bankrupt Maharastra State Electricity Board, fell $240 million behind in payments for electricity drawn from the plant. Copyright (c)2002 TDD, LLC. All rights reserved.

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