Chinese Huaneng Power International Inc is in intensive talks with PT Bumi Resources Tbk (BUMI) for joint action possibility to acquire 90% stakes in holding company of PT Berau Coal, Indonesia's fifth largest coal producer, PT Armadian Tritunggal, worth US$1.48 billion.
A source familiar with the matter said Bumi has opened an opportunity to join strategic investors on its projects, including in Berau. "Bumi hopes that Huaneng Power enables to enter Berau Coal. They can set up financing agreement, while Bumi needs financial support to back-up PT Recapital Advisors in the acquistion," a source said. During the talks, Huaneng is adviced by financial advisor Nomura.
According to Berau financing structure, Bumi has to provide US$300 million of subordinated loan to PT Bukit Mutiara, a special purpose vehicle used by Recapital to buy Berau. Recapital owns 99% stakes in Bukit Mutiara.
Huaneng Power and its subsidiaries develop, construct, operate, and manage large power plants in China. As of June 30, 2007, the company’s attributable and controllable installed capacity were respectively 31,747MW and 36,024MW, making it one of the largest listed power producers in China.
Huaneng previously was interested to bid Berau. But, it decided to pull out from the deal, allowing Recapital and PT Indika Energy Tbk were in shortlisted.Â
