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Tata Power to raise Rs 1,400 cr by selling 15% in 2 coal SPVs

01 Jul 2010 Evaluate

Tata Power will raise $300 million (Rs 1,400 crore) by selling a 15% stake in two special purpose vehicles (SPVs), which own coal mines, to fund acquisitions and cut debt. The SPVs, Bhira Investments and Bhivpuri Investments, will issue shares to private equity firm Olympus Capital Holdings Asia.

Tata Power holds a 30% stake in two coal mines in Indonesia, called KPC and Arutmin, through these SPVs. Olympus Capital will subscribe to shares that are not eligible for dividends, but are subject to a capital protection arrangement. These shares are convertible into ordinary shares after five years.

In 2007, Tata Power had acquired a 30% stake in KPC and Arutmin coal mines for $1.2 billion, which was funded through bridge or short-term loans from banks and money advanced by Tata Power by way of so-called shareholder loans. These SPVs have a combined debt of $675 million.

The Indonesian mine produces 55-60 million tonne of coal annually. Of this, Tata Power uses around 12-14 million tonne of coal for its 4,000-mw Mundra power project.crackcrack

Tata Power Share Price

409.45 9.95 (2.49%)
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Tata Power 409.45
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