Tata Power announced plans to spend US$1.1 billion to buy into one of Indonesia’s largest thermal coalmines.
Through an offshore Special Purpose Vehicle, Tata Power plans to buy a 30% equity stake in Indonesian coal producers PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) and in a related trading company owned by PT Bumi Resources Tbk (Bumi). Holman Fenwick & Willan advised Indonesia’s PT Bumi Resources Tbk.
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The deal is the largest mining M&A in South-East Asia to date, according to the law firm, and will close in three months, subject to shareholder approval.
The move “secures our fuel requirements in light of aggressive growth plans,” Tata Power managing director Prasad Menon told the Press Trust of India.
An offtake agreement with KPC will allow Tata to buy about 10m tonnes of coal per year for its power projects on India’s west coast. The deal will help Tata Power generate some 7,000MW of energy over the next five years.
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