Tata Power to divest ownership in RI coal mining unit

India?s debt-ridden Tata Power Co Ltd through its Indonesian coal mining and trading subsidiary IDX-listed PT Sumber Energi Andalan Tbk plans to sell its entire 30 percent stake in coal miner PT Mitratama Perkasa worth US$120 million, Investor Daily reported Wednesday.

The paper said that Long Haul Holdings Ltd, an investment firm owned by the Bakrie Group, will seek for the buyer of the stake.

Sumber Energi said in a filing with the Indonesia Stock Exchange that the weak coal price was the main reason for the divestment. ?The company is also suffering from financial difficulties,? Sumber Energi management said, adding that the proceeds from the sale may either be used to help finance general operational expenses of the company or return to shareholders as dividend.

Tata Power announced earlier this month that it was also divesting a 30 percent stake in coal miner PT Arutmin Indonesia and associated companies in coal trading and infrastructure to a Bakrie Group entity for an aggregate consideration of about US$500 million to raise extra cash to help repay debts. (*)