Statement re Restructuring

RNS Number:7336U
CESC Ld
18 April 2002


CESC Limited ("CESC") has announced that it has appointed JP Morgan as its 
financial adviser to assist it with a restructuring of certain outstanding 
indebtedness of CESC. CESC has also proposed a meeting with certain creditors, 
including holders of its US $70,000,000 Floating Rate Notes due 2007 
(the "Notes"), to establish a Steering Committee for the purpose of working with 
CESC on restructuring proposals for certain of CESC's indebtedness.

A tariff order (the "Tariff Order") for fiscal years 2000-2001 and 2001-2002 by 
the West Bengal Electricity Regulatory Commission was published in November 
2001. CESC filed an appeal against the Tariff Order in the Calcutta High Court 
on January 7, 2002. The Calcutta High Court commenced hearings on March 18, 2002 
and proceedings are continuing. The Tariff Order has had a negative impact on 
CESC's cash flow, and as a result, CESC was unable to make principal and 
interest payments due on certain of its secured loans.

The secured lenders have so far not sought the acceleration of their debts, 
although default notices have been issued in some cases. Most of the secured 
loan agreements provide for automatic acceleration of the loans in the case of 
any lender seeking repayment of their debt before the due date.

As a result of the foregoing, CESC has given notice to the Trustee for the Notes 
in accordance with its obligations under the Trust Deed dated May 6, 1997 
constituting the Notes that an event of default under Condition 8(c) of the 
Notes has occurred.

In addition, the Trustee has also been provided with a certificate dated 
March 14, 2002 of CESC's auditors showing that based on the audited financial 
statement for the year ended March 31, 2001, CESC did not comply with the
financial ratio covenants set out in Condition 3(b) of the Notes, resulting in a 
default under Condition 8(b) of the Notes.

Accordingly, the Trustee may, and the holders may require the Trustee to demand 
repayment of the Notes, but only if the Trustee has certified that such failure 
to pay is 'materially prejudicial' to the interests of the holders of the Notes.

CESC and the Noteholders have been informed that in view of the foregoing 
information, the appointment of JP Morgan as financial advisor and the proposed 
meeting referred to above, the Trustee has not at this time formed the opinion 
(which it has stated it would only do on the basis of appropriate financial and 
legal advice) and certified that the foregoing events are materially prejudicial 
to the interests of the Noteholders. The Trustee has informed CESC and the 
Noteholders that it will continue to keep the matter under review.



For further information, please contact:

Mr. Anjan Chowdhuri
CESC Limited
CESC House
Chowringhee Square
Calcutta 700 001
India
Fax [phone]



Mr. Victor Leviste 
JP Morgan
40th floor, One Exchange Square 
Central. Hong Kong 
Fax [phone]

 

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