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

Reliance Energy to bid for Globeleq’s global assets

Domestic power major Reliance Energy will bid for the global assets of operating power company Globeleq in the four blocks of Asia, Africa, the Americas and Egypt. Globeleq recently partnered Lanco Infratech to win India’s first ultra-mega power project at Sasan in Madhya Pradesh. Globeleq’s operations, valued at $2 bn, span over 13 countries and accounts for about 5000 MW in 13 power companies. Globeleq’s stake, most of which is in gas-based power plants, totals to about 3000 MW. Lehman Brothers has been mandated to carry out the transactions. Reliance Energy, which is planning to develop several power projects in India including the gas based power project in Dadri, has set its eyes on these assets and is expected to put in an indicative bid by mid-February.

Globeleq was set up by the UK Government’s Department for International Development (DFID) as part of its strategy of promoting the private sector in the developing world. DFID launched Globeleq in 2002 as the power sector arm of its own CDC Group. In January 2004, it separated Globeleq as a stand-alone concern to run CDC’s power portfolio. CDC, Globeleq’s sole shareholder, has $3 billion in net assets and its investment is managed by Actis, the private equity fund manager specializing in emerging markets.

Read more in the article in The Economic Times.

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.