Tata power announced its stakes sales of Indonesia based “PT Arutmin” to maintain cash flow in Mundra (India) based UMPP operations. Tata will sell around 30 per cent of its stake in Coal mining firm (Arutmin).
India’s biggest conglomerate Tata group’s subsidiary company, Tata power has announced to sell its PT Arutmin Indonesia’s whole stake of 30 per cent to Bakrie Group.
Tata has been a partner of the Bakrie Group for nearly seven years, after it bought 30 per cent stakes each in Arutmin and another Coal miner Kaltim Prima Coal (KPC) through a transaction worth of USD 1.1 billion in 2007.
Tata will continue to hold its stake in KPC, which owns one of the largest thermal Coal producing mines in the world.
[su_quote cite=”Company mentioned.”]KPC will also continue to be a part of the supply chain for Tata Power Group’s Coal off-take requirements.[/su_quote]
[su_quote cite=”reported by Anil Sardana, the Managing Director of Tata Power.”]The current Coal price scenario has presented a challenge to the entire Coal mining sector. The proceeds from the sale of Arutmin will provide cash to meet the company’s current challenges.[/su_quote]
[su_quote cite=”Tata power stated.”]They are facing under-recovery challenges in its Mundra UMPP operations and cash flow concerns, has decided to exit from PT Arutmin Indonesia (“Arutmin”) to get additional cash flow and to reduce its consolidated debt. However, sale will not affect the Coal supply to their plants.[/su_quote]
[su_quote cite=”mentioned by Tata Power.”]Considering the present Coal price scenario, Arutmin, which is a mine spread over a number of pits in South Kalimantan had started posing production and cost viability challenges in its operations.[/su_quote]
The sale is subject to restructuring moves, which Tata Power plans to complete in the next three months, the company stated.
The Bakrie Group, which is wellknow as PT Bumi Resources for Coal mining has bagged the deal for USD 500 Million. Bakrie group holding majority stake in Arutmin of around 70 per cent and after getting Tata’s stake, PT Bumi Resources will be the sole owner of PT. Arutmin Indonesia.
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