Gridco Sets Terms For Aes Exit From Cesco

The Grid Corporation of Orissa (Gridco) has set terms for the exit of US power major AES Transpower from the Central Electricity Supply Company (Cesco), power distribution company, before the end of the lock-in period. The prominent among these conditions is repayment of Rs 460 crore dues owed by Cesco to Gridco towards power purchase.

While the state owned Gridco has 39 per cent stake in Cesco, AES 51 per cent and the employees the rest 10 per cent.

As per the shareholders' agreement, signed between Gridco and AES, the latter is not permitted to sell its shares in Cesco to any third party before March 2002. After this date and up to March 2004 AES can only sell its shares with the consent of Gridco.

This clause was built into the shareholders' agreement to keep non-serious bidders away during the divestment of in Cesco in 1998 by Gridco.

Meanwhile, the Gridco board has agreed to relax the lock-in period norm for transfer of AES shares in Cesco to a third party provided the American utility major fulfilled certain financial and contractual obligation -- the prominent of them being payment of outstanding dues to Gridco.

AES has to either clear the Rs 460 crore power purchase bills pending in favour of Gridco or obtain an undertaking from the prospective buyer of its shares on settlement of this outstanding dues before it is permitted to exit the company, a Gridco spokesman said.