"Tata Power, facing under recovery and cash flow challenges due to its Mundra UMPP operations has signed options agreements to sell 5 per cent stake in PT Kaltim Prima Coal to get additional cash as well as to reduce its consolidated debt," the company said in a BSE filing.
The company will sell its stake to Indonesian coal firm Bakrie Group entity.
As part of the deal, Tata Power through its subsidiaries has the option to sell 30 per cent stake in Power Infrastructure Companies, which are associated with PT Kaltim Prima Coal, to the Bakrie Group entity.
"The aggregate consideration for Tata Power's 5 per cent stake is USD 250 million, subject to certain adjustments," the filing said.
Also Read
"The option to partially sell KPC and its related power company has the potential to provide the company the flexibility raise additional funds to meet the current challenges," Anil Sardana, Managing Director, Tata Power said in the statement.
The company signed an agreement to sell its 30 per cent stake in Arutmin and associated companies in coal trading and infrastructure to a Bakrie Group entity.
Tata Power's 4,000 MW ultra mega power project at Mundra in Gujarat continues to face trouble due to increase in the price of Indonesian coal.
It had approached the electricity regulator CERC seeking higher tariff for Mundra project.
The Central Electricity Regulatory Commission (CERC) had said that since there had been a rise in the price of imported coal from Indonesia the private power utility should be compensated.