Olympus Capital commits $300 million to Tata Power
Olympus Capital Holdings Asia is to buy stakes in Tata Power’s coal special purpose vehicles (SPVs) Bhira Investment Ltd. and Bhivpuri Investment Ltd. for $300 million – capital that will be allocated to fund the Indian power producer’s future acquisitions and investments as well as minimizing its debt.
As part of the deal, the PE firm will take a 14-15% stake in the SPVs, issued through fresh shares with differential rights. Both SPVs hold their interests in Indonesian coal mines Kaltim Prima Coal (KPC) and Arutmin, which were reportedly purchased in 2007 for $1.2 billion, giving Tata an overall 30% stake in the coal companies. The SPVs have a combined debt of $675 million, local reports note.
According to Olympus Capital, the firm's lead investor in coal SPVs is its Olympus Capital Asia III fund. The company hired Macquarie Capital Advisors as its M&A advisor and Barclays Capital its financial- and debt-structuring advisor. Barclays Capital and ICICI Bank UK PLC are the mandated lead arrangers on the financing.
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