Tata Power completes Indonesian buy

Tata Power Company today announced the completion of its acquisition of 30% equity stake in 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).

According to a release issued by Tata Power to the BSE today, a bridge loan facility has been provided by a group of banks led by Barclays Bank PLC for $950 million to complete the acquisition. "The bridge loan has a tenure of one year, and the company intends to refinance the  bridge loan facility immediately after completion of the acquisition," the release added.

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

The definitive agreements to purchase 30% equity stakes were signed on March 30, 2007 for a consideration of $1.1 billion prior to working capital and other adjustments. As part of the deal, Tata Power has signed an offtake agreement with KPC, which entitles it to purchase about 10.1 million tonne of coal per annum for an initial period up to 2021.

Prasad R Menon, managing director, Tata Power said: "We are happy to complete the acquisition. It is our endeavour to maximise shareholder value and securitise our fuel requirement in light of the aggressive growth plans chartered out by the company."

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