Enron was given a loan at a time when IFCI, IDBI and ICICI were financial institutions. They were the major lenders. State Bank of India (SBI) was a minor lender compared to these three and a small bit of loans came from Canara Bank, but now IDBI and ICICI have become banks, IFCI remains a financial institution.
Also Read: Assocham seeks OilMin support for natural gas pipeline proj
The Dabhol plant was built through the combined effort of Enron, GE, and Bechtel. GE provided generating turbines to Dabhol, Bechtel constructed the physical plant, and Enron was charged with managing the project through Enron International.
In 2005, it was taken over and revived by the RGPPL (Ratnagiri Gas and Power Private Limited), a company owned by the Indian government.
Ratnagiri Gas, which operates the 1,967-MW Ratnagiri project, had in March 2013 said it might not be able to service its debt if operations continue to remain shut because of lack of gas. The project has been closed since February 21, 2013.
In October 2013, ICICI Bank managing director Chanda Kochhar had written a letter to power minister Jyotiraditya Scindia saying lenders have around Rs 8,500 crore exposure in the project that operated at merely 30 percent capacity in 2012-13 and is barely spinning at present.
However, Malay Mukherjee, MD & CEO, IFCI is not worried about the situation. He says NPA norms for the company, which is a non-banking financial company, are different – 180 days versus 90 days for banks. He says only a small amount is overdue on IFCI’s books. The company has an exposure to Ratnagiri Gas, which amounts to Rs 400 crore. He says the company has written a letter to the lead lender IDBI Bank and hopes the money will be paid.
Below is the verbatim transcript of Malay Mukherjee's interview on CNBC-TV18
Q: Can you detail to us upfront, what has gone bad now, are all of you likely to mark these loans to Dabhol as bad in the quarter gone by?
A: In IFCI’s book this is not going as a bad non-performing asset (NPA) now because unlike banks, where the norms are for 90 days and IFCI still being non banking financial company (NBFC), the NPA norms are different. It is for 180 days. Therefore, till March I have no issue as far as marking that account as NPA is concerned. A small amount is overdue in my book. I am expecting it to come. We have written a letter to the lead lender IDBI and I hope the money will be paid, which has been done in other banks too. So, as far as IFCI per se is concerned, it has not becoming NPA immediately.
Q: Give us bank wise breakup?
A: I will not be able to because I do not remember. However, I am sure it is not more than Rs 400 crore and I remember that IDBI is the lead lender. I am neither lead nor last.
Q: Now your exposure would be to Dabhol or to Ratnagiri Gas.
A: It is to Ratnagiri Gas, the new name.
Q: So all the exposures are only to one entity, Ratnagiri Gas?
A: Yes.
Q: There is no commitment from GAIL or anyone to pay part of the loans because GAIL has an interest in that company?
A: There is no commitment as such.
Q: So no weight on the balance sheets of GAIL because of this commitment?
A: No. Our exposure is to Ratnagiri Gas.
Q: You have any clarity whether the payments to other institutions other than IFCI has already gone bad?
A: No, it has not gone bad and to my information they have been also serviced for this quarter so this quarter it is not becoming NPA. That is to my information. I am not very sure on that.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
