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DPC
threatens to transfer all contractual obligations to MSEB
Sanjay
Jog
Mumbai, Dec 2: Undeterred by the downfall of its parent
in the US, Dabhol Power Company has threatened to transfer
all its obligations under various project contracts to MSEB
under “novation deed” as per the clause 11 of the power purchase
agreement. On November 5, the embattled company had issued
an asset transfer notice to MSEB asking it to respond latest
by January first week, failing which all documents would be
automatically novated in favour of the board.
| Dynegy justifies
spiking buyout |
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Sanjay Jog
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Dynegy Inc has justified its decision
to terminate acquisition offer of the beleagured Enron
Corp. In its reaction through e-mail to The Financial
Express, the Dynegy Inc spokesman John Sousa said
that resulting loss of confidence in Enron had damaged
the support created by the merger announcement on November
9.
Mr Sousa said “while it’s regrettable to see an industry
player experiencing difficulties, our first priority has
been and will continue to be the protection of our shareholders’
interests and the protection of the Dynegy franchise.
Unfortunately, it had become clear that the resulting
loss of confidence in Enron had damaged the support created
by the merger announcement.” |
MSEB sources confirmed the receipt of such
a notice from DPC under clause 11 (3.5) (b), d (2), and 3.8
(a) if the PPA. However, DPC spokesman declined to comment
on this issue.
According to sources, the documents related to phase-I and
phase-II contracts comprising site agreements, agreements
for operation and maintenance, construction contracts, fuel
management, gas supply and liquid fuel supply, LNG transportation,
as also MSEB clearances, security documents and financing
agreements would be novated in favour of MSEB.
However, sources said, MSEB, which held an emergency meeting
with advocate general Ghoolam Vahanvati, that “our stand is
clear. PPA does not exist as it was rescinded on May 23. But
DPC has been implementing various provisions of this rescinded
PPA and sending these notices.”
MSEB sources also said it will neither accept nor respond
to DPC’s novation deed notice in view of the cancellation
of the PPA. “If we respond, we may enter into the DPC’s trap
as the company may claim that PPA is still valid and that
the board has to follow its provisions.”
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