PT Adaro Energy Tbk have expressed interest in buying India' IL&FS Tamil Nadu Power Co. Ltd. (ITPCL) shares and related assets of the debt-laden IL&FS group - Photo by ITPCL

JAKARTA (TheInsiderStories) – Indonesian coal miner PT Adaro Energy Tbk (IDX: ADRO) have expressed interest in buying India’ IL&FS Tamil Nadu Power Co. Ltd. (ITPCL) shares and related assets of the debt-laden IL&FS group, Times of India reported last week.

Beside Adaro, India’ Adani Power Ltd. and state-run NLC India Ltd. are among companies that have expressed interest in buying ITPCL and related assets of the debt-laden IL&FS group, said the report.

Along with the thermal plant in Cuddalore, the group is looking to sell its stake in a captive port associated with the power company. Also on the block is a Singapore-based investment vehicle, ILFS Maritime Offshore Pte. Ltd.

ITPCL is a SPV incorporated by IL&FS Group under the energy platform for implementation of the Thermal Power Project in Tamil Nadu. The company is setting up 3,180 megawatts (MW) thermal power plant in Cuddalore District.

The project is being implemented in Phases. Phase I of the project is for 1,200 MW comprising of 2 units of 600 MW each. Second phase shall have 3 x 660 MW.

Previously, President Director of publicly-listed Adaro’ Garibaldi Thohir has said eyeing power plant projects in Vietnam, Laos, Myanmar and other Asian countries. The effort is part of the company planned to enter global market through its overseas investment arm Arindo Holdings, an affiliate of the company based in Mauritius.

In 2017, Arindo raised US$12.1 million from an initial public offering. The Mauritius-based company put up 1.3 million shares or equivalent to 5 per cent of its equity, at $11.45 apiece.

Arindo is an investment holding company founded in Mauritius on March 28, 2005, with the important role of facilitating investment opportunities abroad.

Adaro is targeting expansion of its logistics and power generation business, as well as optimizing its mining sites for future projects. The producer intends to develop power plants in South Kalimantan, in collaboration with state-owned power producer PT Perusahaan Listrik Negara (PLN) it will focus on mine-mouth power projects in Kalimantan and several other areas across the country.

Adaro says it aims to build 5,000 MW of power generation capability, up from a current 2,260 MW. Last year, Adaro and EMR Capital Ltd completed acquisition process in Kestrel Coal Mine on Wednesday (01/08).

It is a follow-up of an agreement between Adaro and EMR on March 27, 2018, to acquire 80 percent of Rio Tinto‘s coal asset Kestrel in Australia. The ownership in the company after the transaction completed will be Kestrel Coal Resource Pty Ltd (80 percent) and Mitsui Coal Australia (20 percent).

Kestrel Coal Resources is a joint venture company between ADRO and EMR with ownership of 48 percent and 52 percent, respectively. Adaro and EMR reportedly spend US$2.25 billion for this acquisition. EMR Capital Ltd is a private equity company specializing in the mining sector.

Thohir said the Kestrel acquisition is an important step in the company’ expansion in the metallurgical coal that has been started with Adaro MetCoal. Kestrel has adequate metallurgical coal resources with a capable infrastructure and high-skill manpower.

Kestrel produced 4.25 million tons of metallurgical coal in 2017 and has a marketable reserve of 146 million ton and resource of 241 million tons. Earlier he said, the company aims to double Kestrel Mine’s production in attempts to bring the company to become one of the world’s largest coking coal producers.

Thohir aimed to raise Kestrel Mine’ current production to 10 million metric tons of coking coal per year from current 5.5 million tons.

On the coal marker, Adaro Energy sees the seaborne share of China as declining, while there will be an increased potential from Southeast Asia, Japan, Korea, Taiwan, and India.

Adaro has three arms to manage power plants in the country, namely, PT Makmur Sejahtera Wisesa, owner & operator of the 2x30MW at Kalsel Bhimasena Power (100 per cent); Cooperation with 2x1000MW power plant project in Central Java Jateng Power (34 per cent) and 2x100MW power plant project in South Kalimantan (65 per cent).

by Linda Silaen, Email: linda.silaen@theinsiderstories.com