Tata Power Signs Option Deal To Sell 5% Stake In Indonesian Coal Mine

Tata Power, India's largest integrated power company with a significant international presence, said that the company has signed option agreements to sell 5% stake in PT Kaltim Prima Coal (KPC) for $250 million to Bakrie Group entity, to get additional cash flow as well as to reduce its consolidated debt after facing under-recovery and cash flow challenges due to its Mundra Ultra Mega Power Projects (UMPP) operations.

Notably, the entire 30% stake in KPC related power infrastructure companies is also covered for sale in the agreement to the same entity. KPC will continue to be the part of supply chain for Tata Power Group's coal offtake requirements.

Tata Power Company, however, would continue to hold 25% stake in KPC if the option is exercised. The announcement was made after market hours on Friday, 4 July 2014.

"The option to partially sell KPC and its related power company has the potential to provide the company the flexibility to raise additional funds to meet the current challenges," Anil Sardana, managing director, Tata Power said.

PSU oil marketing companies (OMCs) will be in focus after the Ministry of Petroleum and Natural gas stated that it is not proposing any increase in the prices of subsidised LPG and kerosene. PSU OMCs suffer under recoveries on the domestic sale of diesel, LPG and kerosene at controlled prices.

IDBI Bank said that the board of directors of the bank has approved the proposal for mobilisation in one or more tranches of Rs 4,000 crore and foreign currency resources up to $7.5 billion.

Adani Ports and Special Economic Zone (APSEZ) said it has entered into an agreement with France's CMA CGM Group to develop a new common user container terminal at Mundra Port. Its construction will be initiated soon and will be completed in two years. The new terminal will be set up as a joint venture between APSEZ and CMA CGM Group.