HOLMAN FENWICK & WILLAN advised Indonesia’s PT Bumi Resources Tbk on the US $1.3 ($1.5) billion sale of a 30 per cent stake in its coal companies to Tata Power.
The deal is the largest M&A mining deal so far in South-East Asia, according to the law firm, and will close in three months, subject to shareholder approval.
HFW represented Bumi Resources on the sale of PT Kaltim Prima Coal (KPC), PT Arutmin Indonesia and a related trading company, as well as on a long-term agreement for KPC to supply approximately 10 million tonnes of coal a year to Tata.
“The firm has teams in Singapore, Hong Kong, Melbourne and London with specific, in-depth, expertise in the coal industry,” said HFW lead partner Alistair Duffield.
“This transaction demonstrates the value of our investment in building this expertise, and our ability to execute major complex transactions in the sector."
The Bumi Resources coal mining companies are together among the top-three largest exporting thermal coal mines in the world. The Tata Power Company Limited is India's largest privately owned utility company.
Bumi said it would use the proceeds of the sale to fully redeem the outstanding balance of the existing US$900 million ($1.08 billion) in Bumi’s subsidiaries, intercompany debt in Bumi’s mining company subsidiaries, Bumi’s own debt and for its working capital.
Tata Power will use the coal to support its existing power plant at Trombay and its upcoming power projects on the west coast of India which will produce 7,000 MW and be developed over the next 5 years.
These projects will need about 21 million tonnes of imported coal which Tata Power said it will secure through a combination of purchasing equity stakes in coal mines as well as entering off-take contracts.