Tata denies it will sell its stake in KPC and Arutmin

Tata Power of India has denied a press report that the company would sell its 30 percent stake in coal mining companies PT Kaltim Prima Coal (KPC) and Arutmin, saying that the report is untrue.

Tata said that the company?s decision to acquire the two companies? 30 percent stake from PT Bumi Resources (Bumi) in 2007 was part of the company?s long-term business strategy.

As part of the acquisition deal, Tata has the rights to buy up to 10 million tons of coal from the two companies a year to meet the coal need of its power plant.

?We therefore strongly denied the report that we planned to sell the stakes in the two companies,? the company said a statement to clarify a newspaper report that it would sell the 30 percent stake to help the company pay its debts

The newspaper report said that Tata would sell its 30 percent stake in KPC and Arutmin it bought from Bumi for US$1.2 billion in 2007. Tata was forced to resell the stake to pay its debts. Tata had borrowed about $850 million to partly finance the purchase.

Bumi, according to the report, would team up with Northstar Pacific and Credit Suisse to repurchase the stake. (*)