Tata Power raises loan for buying of 30% in Coal firms

The USD 950 million bridge loan had a tenor of 1 year of which USD 850 million is being refinanced with long-term loans. The refinancing consists of a non-recourse USD 580 million facility and a USD 270 million facility with recourse to the Company. The non-recourse facility has a door-to-door tenor of 6 years and the recourse facility has a door-to-door tenor of 7 years. The pricing on the facilities is competitive for loans of such nature. The financing has been provided by a group of banks led by 5 mandated lead arrangers including Barclays Capital, Bank of India, ICICI Bank, State Bank of India and Sumitomo Mitsui Banking Corporation.

The Company will evaluate the option of refinancing the balance USD 100 million of the bridge loan at an appropriate time within the residual bridge loan tenor.

Speaking on the occasion, Mr. Prasad R Menon, Managing Director, Tata Power said "We are happy to refinance the bridge loan at competitive pricing in such challenging financial markets. The rising coal prices in the international market reinforce our belief that our investment in Indonesian coal companies is timely and pragmatic".

The Coal Companies (KPC and Arutmin) are together among the top three largest exporting thermal coal mines in the world. They have excellent coal export infrastructure and are strategically well placed to act as a source of supply for increasing regional demand. Together, KPC and Arutmin produced approximately 54.2 MT of coal in 2007. Fast growing regional demand for thermal coal coupled with supply constraints in certain exporting countries has led to sharply higher coal prices. The Coal Companies are "world class assets" and have enjoyed robust financial performance recently given rising production volumes and the increases in coal prices.