Tata Power announces refinancing of its bridge loan

Mumbai, Apr 29 (UNI) The Tata Power Company Limited (Tata Power), India's largest private power utility, today announced the refinancing of its bridge loan taken for the acquisition of 30 per cent equity stakes (the Purchase) in major Indonesian thermal coal producers, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) (together the Coal Companies), as well as related trading companies owned by PT Bumi Resources Tbk (Bumi).

The Company has successfully refinanced USD 850 million out of a total of USD 950 million bridge loan taken at the time of acquisition.

The USD 950 million bridge loan had a tenor of one year of which USD 850 million is being refinanced with long-term loans. The refinancing consists of a non-recourse USD 580 million facility and a USD 270 million facility with recourse to the Company. The non-recourse facility has a door-to-door tenor of 6 years and the recourse facility has a door-to-door tenor of 7 years. The pricing on the facilities is competitive for loans of such nature. The financing has been provided by a group of banks led by five mandated lead arrangers including Barclays Capital, Bank of India, ICICI Bank, State Bank of India and Sumitomo Mitsui Banking Corporation.

The Company will evaluate the option of refinancing the balance USD 100 million of the bridge loan at an appropriate time within the residual bridge loan tenor.

Speaking on the occasion, Managing Director Tata Power Prasad R Menon said ''We are happy to refinance the bridge loan at competitive pricing in such challenging financial markets. The rising coal prices in the international market reinforce our belief that our investment in Indonesian coal companies is timely and pragmatic.'' The Coal Companies (KPC and Arutmin) are together among the top three largest exporting thermal coal mines in the world. They have excellent coal export infrastructure and are strategically well placed to act as a source of supply for increasing regional demand.

Together, KPC and Arutmin produced approximately 54.2 MT of coal in 2007. Fast growing regional demand for thermal coal coupled with supply constraints in certain exporting countries has led to sharply higher coal prices. The Coal Companies are ''world class assets'' and have enjoyed robust financial performance recently given a rise in production volumes and the increases in coal prices.

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