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Tata Power in $1.3 bln Bumi coal deal JAKARTA/MUMBAI (Reuters) - Tata Power Co. Ltd. has agreed to buy 30 percent stakes in two coal mines and other assets from Indonesia's PT Bumi Resources Tbk for $1.3 billion, the Indonesian firm said on Saturday. Tata Power said in a separate statement it has signed agreements to purchase the stakes in PT Kaltim Prima Coal and PT Arutmin Indonesia, two of Indonesia's largest coal mines, and a related trading company owned by Bumi. Tata is seeking coal supplies for the company's upcoming power projects on the west coast of India comprising 7,000 megawatts (MW) to be developed over the next 5 years. Bumi has had a chequered record trying to push through deals to sell its coal assets. Last year it failed to sell stakes in PT Kaltim Prima Coal and PT Arutmin coal mines to local investment bank Renaissance Capital for $3.2 billion in what would have been Indonesia's second-biggest acquisition. Sources said creditors for Renaissance had baulked after one of the mines up for sale performed worse than expected because of heavy rain. "Tata Power takes a 30 percent stake in Bumi's coal assets at a price of $1.3 billion, including working capital and closing adjustment," Dileep Srivastava, an investor relations' official at Bumi, said in an e-mail sent to Reuters. Tata said the funding of the deal would be done through a combination of debt, as well as internal accruals and borrowing from the company. "As part of the purchase, the company has signed an offtake agreement with KPC (Kaltim Prima Coal) which entitles it to purchase about 10 million tonnes of coal per annum," Tata added. Prior to working capital and other adjustments, Tata said the deal was worth $1.1 billion. Bumi is controlled by the family of Indonesia's chief social welfare minister Aburizal Bakrie. |