Rediff.com« Back to articlePrint this article

Tata Power buys Indonesian cos' pie

June 27, 2007 15:37 IST

Tata Power said on Wednesday completed acquisition of 30 per cent stakes in Indonesian thermal coal producers -- PT Kaltim Prima Coal and PT Arutmin Indonesia, and other related coal trading companies owned by PT Bumi Resources Tbk.

The definitive agreements to purchase the equity stakes were signed on March 30 by the company for a consideration of $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 around 10.1 million tons of coal per annum till 2021.

This purchase would support the company's upcoming power projects on the country's west coast, including 7,000

MW to be developed over the next five years.

These projects require around 21 million tons of coal. In order to complete the acquisition, a bridge loan facility worth $950 million was taken from a group of banks led by Barclays Bank PLC.

This has a tenor of one year and is competitively priced for loans of such nature, a company statement said. Tata Power intends to refinance this bridge loan facility immediately after completion of the acquisition and Barclays, which has expressed an interest in doing so, will be given preference, the release said.

The acquisition was made through two SPVs -- Tata Power (Mauritius) Ltd and Tata Power (Cyprus) Ltd.

© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.