$3 BILLION for Dabhol!
VERY BULLISH! This is better news than the auction(wholesale trading business) and resolution of the Enron/Dynegy Pipeline deal put together!
This deal ought to expedite the EXIT from CHAP 11 - BIG TIME!
Mumbai, Jan. 19 (Bloomberg) -- Total Fina Elf SA, Europe's biggest refiner, plans to bid for a $3 billion Indian power plant controlled by Enron Corp., the U.S. energy company at the center of the biggest-ever bankruptcy proceeding, quote.bloomberg.com.
BOMBAY, Jan 21 (Reuters) - Lenders to bankrupt U.S. energy trader Enron Corp's $2.9 billion power project in India are set to put it up for sale, with six big companies so far expressing interest, a highly placed source in the group overseeing the process said on Monday.
finance.lycos.com.
The Industrial Development Bank of India (BOM:IDBI) and the Overseas Private Investment Corporation, a U.S. agency that provides insurance to American companies investing in "risk areas", head the group overseeing the bidding process. Note: The Overseas Private Investment Corp., a U.S. government agency that committed $360 million in risk insurance and loan guarantees on the Dabhol generating plant, also weighed in, threatening in November that India may face U.S. action if it didn't resolve Enron's dispute.
BACKGROUND: Dabhol, which owns a 740-megawatt power plant and was building a 1,444-watt plant, was Enron's biggest investment outside the U.S. as the company sought to expand overseas. Enron put the plant up for sale before it filed for bankruptcy on Dec. 2 because of a dispute over $250 million of unpaid bills from the plant's sole customer, the Maharashtra State Electricity Board.
Wednesday, HOUSTON, Nov 14 (Reuters) 90 Minute Conference Call
Kenneth Lay:
"We fully understand and regret that the combination of these events has resulted in the complete loss of investor confidence. We are fully committed to fixing the problems," he said.
Lay's act of atonement came after Enron said he had decided to waive his right to a $60 million golden parachute as part of Dynegy's planned buyout, following a tense exchange with employees about his severance package on Tuesday.
Enron agreed on Friday to be taken over by Dynegy for about $9 billion in stock after investor unease over its murky off-balance sheet deals drove its stock price down to $7 last week from a high of $90.56 in August 2000.
"In hindsight we made some very bad investments in non-core businesses," Lay said in a 90-minute conference call.
“Many of those investments, such as an ill-fated venture into the water services business and a power plant project in India that became mired in a payments dispute, performed below Enron's worst expectations,” Lay said.
"The negative impact of these investments have been exacerbated through the extensive use of debt capital both on and off the balance sheet," Lay said.
Comments: A couple of points need to be made. First, the words of ‘the man’ regarding Dahbol:
“ a power plant project in India that became mired in a payments dispute, performed below Enron's worst expectations,”Ken Lay….
I think it significant that of all that had gone wrong, Mr. Lay singled out the Dahbol Power Plant as performing below their worst expectations. It follows that the sale of this albatross will contribute significantly toward Enron emerging from the quagmire it is presently mired in. I don’t have a clue how much Enron may have borrowed (or what it may have collateralized) to fund its 65% share of Dahbol; but, whether they get cash, reduction of debt, or both, as a result of this asset sale,, the transaction should contribute mightily in in shining more light on Enron’s ambiguous, floating - balance sheet.
The “Market” doesn’t like question marks and neither do I.
Secondly, . If those $#!&* would just pay up for the electricity delivered; but, not paid for it would go a long way toward solving the Company’s immediate financial problems.
Good luck,
SargeK |
