BUMI will take over Tata Power's share on KPC and Arutmin

Rumor has Tata Power will sells his 30% share on Kaltim Prima Coal and Arutmin Indonesia due to financial difficulties in paying debt. On March 2007 this India Company has bought 30% share of KPC and Arutmin for 1.2 Billion US Dollar. For this, Tata got loans 850 Million from Barclays Capital, Bank of India, ICICI Bank State Bank of India, and Sumitomo Mitsui Banking Corporation.

Analysts say Tata Power will face difficulties in paying debts with coal price below US$ 70. Sliding of Thermal coal price to $65 a metric ton within eight months will cut Tata devidents from Bumi Resources and affecting Tata pay debt. In 2008, Tata get $220 Million of devidents and predicted to fall to $170 million in 2009. Autralia Newcastle's coal price (Asia reference) has been slump 14% or the lowest since June 2008.

As deal, Tata should give first offer of his shares to BUMI when selling KPC and Arutmin. His offer will be 50% lower than buying price. For this offer, BUMI will cancel acquisition of Dharma Henwa (DEWA), Fajar Bumi Sakti and Pendopo Energi Batubara. Although, it sounds Bapepam-LK will cancel this acquisition due to material transaction since the acquisition was held without stake holder agreement.