Tata Power to acquire 30% stake in Indonesian coal firm Bumi resources for $1.3 bn

Tata Power will pay $1.3 bn to buy stakes in Indonesian PT Bumi Resources Tbk’s two coal mines. Tata Power will acquire 30% stakes in Bumi’s PT Kaltim Prima Coal and PT Arutmin Indonesia, two of Indonesia’s largest coal mines, and a related trading company. The two coal mines produced 53.5 mn tonnes of coal per year in 2006.

Tata Power will also buy 10 mn tonnes of coal from Kaltim Prima Coal for two proposed power projects with a capacity to generate a total of 7000 MW. The plants will be built on the west coast of India over the next five years.

Tata Power generates 2300 MW of power in the country and has been eyeing coal reserves in Australia, Indonesia and South Africa to tie up supplies for its proposed 15,000 MW-capacity expansion plan. Tata Power needs about 21 mn tonnes of imported coal. The company expects that 50% of the demand will be addressed through this deal.

Tata Power has three months to complete the transaction.

Read more in The Economic Times article.
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REL, Tata Power looking at Indonesian coal company Bumi
Tata Power to bid $1.6 bn for Indonesian coal mine Bumi Resources

Tata Power to bid $1.6 bn for Indonesian coal mine Bumi Resources

Tata Power is preparing to bid around $1.6 bn for a 30% stake in Indonesian coal company Bumi Resources in an effort to counter-bid Japanese company Mitsubishi’s offer of $1.32 bn. Mitsubishi has made the highest bid so far.

Tata Power has been asked to submit a binding bid by February-end. Mumbai-based Tata Power major may also look at hiking the bid, if found necessary.

Bumi had put a reserve price at $1 bn. Five bidders were short listed including the Anil Ambani-owned Reliance Energy and Kepco, a power major from South Korea.

Tata Power’s bid will put the valuation of Bumi resources at $5.2 bn. Tata Power has won the 4000 MW Mundra Ultra-Mega Power Project and has been actively scouting for imported coal at cheaper rates. It would need to import around 12 mn tonnes of coal annually starting 2012 for the project.

Read The Economic Times article.
Related Post: REL, Tata Power looking at Indonesian coal company Bumi

REL, Tata Power looking at Indonesian coal company Bumi

The Economic Times reports that power sector majors Reliance Energy and Tata Power are looking at buying an equity stake in Bumi Resources, an Indonesian coal firm, to meet the fuel requirements for their power plants in India. International companies such as Mitsubishi Corporation, South Korean power company Kepco and a Glencore subsidiary have also shown interest in Bumi. Bumi Resources is Indonesia’s largest coal producer and exporter with reserves of 52 mn tonnes, and has put a reserve price of $1 bn for around 30% stake. Acquiring coal mines would help the companies in assuring fuel supplies. Also, Indonesian coal has lower ash content and higher calorific value than Indian coal, resulting in higher power generation with less fuel.