Rothschild selected to oversee Dabhol restructuring

Vol 7, PW 2 (09 Apr 03) News in Brief

Indian lenders have appointed N.

M. Rothschild & Sons as financial advisor to oversee the restructuring and sale of the stricken Dabhol power station and its attached LNG import terminal.

IDBI sent the appointment letter on 4th April - a day after foreign lenders announced their intention to terminate Dabhol's PPA with the Maharashtra State Electricity Board, its sole customer. A source tells us Rothschild "is beginning work" on its Dabhol mandate but that the foreign lenders' move has complicated matters.

Once foreign lenders succeed in cancelling the PPA, MSEB is "contractually obliged to purchase the project" for a minimum price equal to Dabhol's total debt of more than $1.5bn. Two thirds of this is owed to Indian lenders and the rest to foreign lenders.