TPC raises US $300 million by stake sale in SPV
Tata Power Company (TPC), India’s largest private sector power firm is raising US $300 million from private equity fund Olympus Capital by selling its 14-15 per cent stake in the special purpose vehicles (SPVs) who own two mines in the Indonesia.
Tata Power owns 30 per cent stake in two mines which are owned by Indonesia’s Bhumi Resources. The proceeds of stake will be used to clear debt of US $ 675 million which Tata Power raised to buy the stakes in mine. Tata Power had acquired stake for US $1.2 billion in 2007. TPC has signed an agreement to raise US $300 million in Bhira Investments Ltd and Bhivpuri Investments Ltd Coal SPVs through shares, with differential rights to be issued to Olympus Capital Holdings Asia (Olympus Capital), it said in a press release.
Olympus Capital Holdings investments in India includes Orient Green Power, and Quatrro BPO Solutions. “This long-term, flexible financing enhances our ability to achieve our strategic goals of securing sustainable sources of supply for our rapidly growing power generation base,” said Prasad Menon, managing director Tata Power.
Tata Power is setting up a 4,000 Mw UMPP at Mundra in Gujarat’s Kutch district. It requires 11-12 million tonnes per annum (mtpa) of imported coal. The company has an offtake agreement with KPC and Arutmin for 10.11 mtpa, plus or minus 20 per cent. It is looking for additional mines in Australia, Mozambique and South Africa to bridge the gap.
Tata Power had taken a bridge loan of US $950 million, borrowed by Tata Power (Cyprus) Ltd (now named Bhivpuri Investments) and fully guaranteed by the Company. Another US $273 million was borrowed as shareholder loan from Tata Power to Tata Power (Mauritius), now named Bhira Investments. The bridge loan was subsequently refinanced and the current outstanding debt is US $335 million as non-recourse and US $340 million as recourse debt.
Leave your response!