TATA acquires 30 pc stake in Indonesian coal co

Mumbai, June 27: Leading private power utility Tata Power Company Limited today announced the completion of its acquisition of 30 per cent equity stake in major Indonesian thermal coal producers, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin), as well as related trading companies owned by PT Bumi Resources Tbk (Bumi).

In order to complete this acquisition, a bridge loan facility has been provided by a group of banks, led by Barclays Bank PLC, for the amount of US 950 million dollars. This bridge loan has a tenor of 1 year and is competitively priced for loans of such nature, Tata Power said in a release here.

Speaking on the occasion, Tata Power Managing Director Prasad R Menon said ''We are happy to complete this acquisition. It's our endeavour to maximise shareholder value and securitise our fuel requirements in light of the aggressive growth plans chartered out by the company''.

Tata Power intends to refinance this bridge loan facility immediately after completion of the acquisition, and Barclays, which has expressed interest in doing so, will be given preference, the company said.

''This bridge loan has enabled Tata Power to become a shareholder of the coal companies quickly, to help maximise shareholder value.

The acquisition was made through two Special Purpose Vehicles (SPVs) -- one formed in Mauritius [Tata Power (Mauritius) Limited] and the other in Cyprus [Tata Power (Cyprus) Limited],'' the company said.

The definitive agreements to purchase 30 per cent equity stakes were signed on March 30 for a consideration of USD 1.1 billion prior to working capital and other adjustments.

As part of the purchase, Tata Power has signed an Offtake Agreement with KPC which entitles it to purchase about 10.1 million tonnes of coal per annum for an initial period upto 2021 which is extendable thereafter.

This purchase supports Tata Power's upcoming power projects on the west coast of India comprising 7,000 mega watt to be developed over the next 5 years. These projects will require approximately 21 million tonnes of imported coal, the release added.

UNI