Multinationals General Electric (GE) and Bechtel, which have jointly acquired the 65.8 per cent shareholding of Enron and its subsidiaries in the now-fallen Dabhol Power Company (DPC), have made a fresh offer to the Government of India (GoI) for settling their equity and contractual claims of $400 mn “to resolve the dispute on a friendly, mutually-negotiated basis, with the hope that all litigation becomes unnecessary.’’ These claims comprise $260 mn towards 100 per cent of foreign equity held by Enron, GE and Becthel (it includes $20 mn towards the recent acquisition of Enron stake by GE and Bechtel) and $140 mn towards contractual claims. After the US Bankruptcy Court’s order of April 8 allowing them to acquire shares of Enron and its subsidiaries, GE and Bechtel have expressed their willingness to GoI to actively participate in the revival of Dabhol phase-I (658 mw) and the completion of phase-II (1444 mw). This proposal assumes significance, coming ahead of DPC lenders’ meet on April 26 to discuss various issues relating to the dedollarisation of debt of offshore lenders and bidding route.A DPC spokesperson said GE and Bechtel would acquire shares of Enron Corp and its affiliates in two tranches. About 39 per cent of Enron’s shares would be transferred to GE and Bechtel at this time. The remainder 26 per cent will remain in the name of Enron and its subsidiaries for the time being. ‘‘This is required to fulfill the requirements of the GoI counter-guarantee. These remaining shares will move to the accounts of GE and Bechtel after/when the GoI counter-guarantee holding requirement is waived by the GoI,’’ he said, adding these shares were obtained with the assistance of Opic and with the full knowledge of the GoI and the Indian Financial Institutions (IFIs). “It is incorrect to conclude that Opic helped GE and Bechtel, while the GoI did not similarly assist any Indian party. The sale of Enron shares to GE and Bechtel was concluded simply to facilitate a future sale of 100pc of the foreign equity to a buyer of the choice of the GoI/IFIs/lenders in a quick and efficient manner. So long as Enron continued to hold these shares, it would not be possible to negotiate a sale of these shares to an Indian/foreign buyer without the time consuming process a bankruptcy hearing requires. Therefore this action, as long known to the GoI/IFIs, is in the interest of a settlement,” he said.In its reaction, MSEB said that the GE-Bechtel proposal needs to be examined in the context of a framework prepared by the Ministry of Finance for resolution of the dispute. The Indian lenders backed by guarantees of GoI will buy out the offshore lenders. This part of the exercise has been started.
