Tata Power cancels $300 million deal with Olympus Capital

Tata, which announced the deal's breakdown via a statement to the Bombay Stock Exchange, did not elaborate about which conditions had not been met, but noted that, "the conditions precedent as stated therein were not fulfilled by the long stop date. The company, Bhira and Bhivpuri have exercised their rights under the investment agreement and have terminated the investment agreement on January 01, 2011."

When contacted, Olympus Capital declined to comment on the event. Tata has indicated that the SPVs would seek capital from other investors.

In July, Tata Power announced that it brokered the deal with Olympus to raise capital to fund the Indian power producer's future acquisitions and investments as well as minimize its $675 million debt. The PE firm was slated to take a 14-15% stake in each of the two SPVs, issued through fresh shares with differential rights, which offer no dividend rights for five years, but are convertible into regular shares after such time. Both SPVs hold interests in Indonesian coal mines Kaltim Prima Coal (KPC) and Arutmin, which were purchased from PT Bumi Resources Tbk in 2007 for $1.2 billion, giving Tata an overall 30% stake. Bumi maintains its majority shareholder position with 70%.

 

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• Olympus Capital Holdings Asia