Coal news and updates

Tata Power to sell 5% stake in Indonesia mine

July 7: Tata Power Company Limited said it has decided to sell 5% stake in Kaltim Prima Coal (KPC), Indonesia to the Bakrie Group of Indonesia for $250 million, the company said in a statement.

The company is facing under-recovery and cash flow challenges due to its Mundra ultra mega power project (UMPP) and this agreement will help the company to get additional cash flow as well as reduce considerable debt, the statement said.

Tata Power, however, will continue to hold 25% stake in KPC which will also continue to be a part of the supply chain of the Tata Group’s coal and offtake requirements.

Anil Sardana, Managing Director of Tata Power said, “The option to partially sell KPC and its related power companies could provide the company the flexibility to raise additional funds to meet existing challenges. If the option is exercised, there will be no impact on the coal supplies to our plants since we will stay invested in KPC mines to the extent of 25% and our coal supply agreement will continue as it is. There will also not be any dilution of our rights under the KPC shareholders agreement as a result of the 5% sale.”