Tata Power in Rs. 1,500-cr pact to sell Indonesian mine.

Tata Power said on recently that it has signed an option deal to sell a 5 per cent stake in Indonesian coal company PT Kaltim Prima Coal (KPC) to a subsidiary of Indonesia's Bakrie group for about $250 million (Rs. 1,500 crore).

The agreement also includes an option to sell its 30 per cent stake in related power infrastructure firms to the same entity. The Bakrie group has interests in infrastructure, telecommunications and plantations.

Tata Power had bought a 30 per cent stake in the two thermal coal companies - Kaltim Prima Coal and PT Arutmin Indonesia - for about $1.1 billion in an effort to arrange coal supplies for its power plants in India. It had also signed an agreement with Kaltim Prima Coal to buy about 10 million tonnes of coal a year.

In a communication to the stock exchanges, the company said it was 'facing under-recovery and cash flow challenges due to its Mundra UMPP (Ultra Mega Power Project) operations'. The stake sale will help the company get additional cash flows and reduce its consolidated debt.

HBL