A group of banks led by Barclays Bank PLC provided a one-year bridge loan facility for $950 million, which Tata Power will refinance, quite likely with Barclays, which has expressed an interest in it, immediately on completion of the acquisition.

Tata power had used this bridge loan to become a shareholder of the two companies. The acquisition was made through two special purpose vehicles (SPVs), one formed in Mauritius, Tata Power (Mauritius) Ltd and the other, Tata Power (Cyprus) Ltd, in Cyprus.

The definitive agreements to purchase the 30-per cent equity stakes in the mines were signed in March, for $1.1 billion prior to working capital and other adjustments. As part of the purchase, Tata Power has signed a renewable "offtake" agreement with KPC, which entitles it to purchase about 10.1 million tonnes of coal every year till 2021. (See: Tata Power to acquire 30-per cent stake in $1.3-billion Indonesian coal mines)

Tata Power has acquired the stakes in the twm mines, owned by P T Bumi to meet the power requirement of its upcoming 7,000 MW power projects on the West coast, which are Tata Power (Cyprus) Ltd expected to require approximately 21 million tonnes of imported coal.

Prasad R Menon, managing director, said, " It''s our endeavour to maximize shareholder value and securitise our fuel requirements in light of the aggressive growth plans chartered out by the company".

The two companies are together among the three largest thermal coal mines in the world, with excellent coal export infrastructure and are strategically well placed to act as a source of supply for increasing regional demand.

Last year KPC and Arutmin produced a combined 53.5 MT of coal with over 95 per cent exported.