India's Tata Power Company Ltd said on Friday it has signed an option deal to sell a 5 percent stake in coal miner PT Kaltim Prima Coal (KPC) to a unit of Indonesian conglomerate Bakrie Group to reduce debt and improve cash flow.
Tata Power said the 5 percent stake in the Indonesian coal miner is valued at about $250 million, adding that if the option is exercised it would still hold a 25 percent stake in PT Kaltim Prima Coal.
Tata Power, part of India's salt-to-steel Tata conglomerate, also signed an option deal to sell its entire 30 percent stake in power infrastructure companies related to KPC to the Bakrie Group, the company said in a statement late Friday.
"If the option is exercised, there will be no impact on the coal supplies to our plants, since we will stay invested in KPC mines to the extent of 25 percent and our coal supply agreement will continue as it is," Tata Power's managing director, Anil Sardana, said.
A rise in operating costs at the company's 4,000 megawatt Mundra plant in the western Indian state of Gujarat has been hurting Tata Power, which reported a net loss of 1.45 billion rupees ($24.6 million) in the quarter ended March.