GE leaves India in control

SINGAPORE, JULY 4 : General Electric Co. has reached a settlement to sell its equity in India's mothballed Dabhol power project, a key step in the government's plans to resurrect the facility, the Asian Wall Street Journal reported on Monday.

Bechtel is also expected to reach a settlement soon.

GE did not specify, in a statement released on the weekend, how much it would receive for its stake in the $2.9 billion venture, the journal said.

A person familiar with GE's negotiations with a group of Indian financial institutions handling the ownership transfer said payments would total $145 million, the newspaper said.

The settlement leaves Bechtel Group Inc., a San Francisco engineering and construction company, as the only foreign stakeholder in Dabhol that has not reached a settlement.

Bechtel and GE hold about 85 per cent of Dabhol after buying the stake of original owner Enron Corp. last year. The remainder is held by the Maharashtra State Electricity Board (MSEB).

Enron filed for bankruptcy protection in 2001 amid a massive accounting scandal.

Dabhol, in Maharashtra, was designed to produce 2,184 megawatts of power but was shut down in 2001 after a dispute between Enron and MSEB, also its sole consumer.

The journal said that more than 20 lenders to Dabhol had reached agreements to have their debts repaid at an undisclosed sum.

Resolving the claims of foreign shareholders will allow the Indian government to proceed with a rescue plan under which two public sector companies would take over the generating plant and oversee its restart, it said.




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