NTPC seeks coal assets of Australian miner Bandanna

NTPC, the largest power producing company in the country, is seeking stake in the coal assets of Bandanna Energy, an Australian miner.

Other Indian firms in the race are said to be JSW Steel and Aditya Birla Group.

The Brisbane-based company launched a strategic review late last year and appointed Swiss bank UBS to advise on ways to raise funds to develop three projects in the Bowen Basin.

“We have expressed our interest in the coal assets of Bandanna, but there is stiff competition for the deal as there are many suitors,” said an NTPC official.

The value of the bids can be anywhere between $900 million and $1.5 billion,” said the official.

NTPC has recently been asked to surrender five of its six captive coal blocks as company has failed to achieve the necessary milestones even after five years of allocation.

The company had plans to invest as much as Rs10,000 crore to develop these coal mines.

Coal is critical to NTPC as  80% of its installed capacity of about 34,000 mw is coal-based.

JSW Steel bought seven coking coal mines in May for $100 million in the US, with reserves of more than 120 mt. Bandanna holds 11 exploration permits for coal (EPCA) with applications for a further five, in the Bowen and Galilee Basins in Queensland.

In addition the company has conventional oil and gas exploration interests in the Cooper Basin of South Australia and Queensland and mineral exploration licences, primarily for oil shale in Queensland.

A release by Bandanna said the company had received number of non-binding indicative bids and, in conjunction with its advisors UBS, had selected a shortlist of parties to progress to a second stage of the transaction process which will involve detailed due diligence.

Second-stage proponents have variously expressed interests in both individual project assets and corporate based transactions, added the company release.

Macquarie Group Ltd is advising NTPC, one company official told Bloomberg.

Bandanna may have rejected indicative offers of less than A$1 billion ($1.05 billion) as it selected a shortlist of bidders for the possible sale of the company or its individual projects, the Australian Financial Review reported May 23 in its Street Talk column, without saying where it got the information.

NTPC and Essel Mining & Industries Ltd, an Indian resource company controlled by billionaire Kumar Mangalam Birla, may be among the initial bidders, the Review said. JSW Steel Ltd, Aditya Birla Group and Jindal Steel & Power Ltd are among Indian companies shortlisted by Bandanna, Reuters reported, without identifying the source of the information.

Paula Hannaford, a spokeswoman for Macquarie in Sydney, declined to comment. Andrew Crook, a spokesperson for Bandanna, didn’t immediately reply to a voice mail seeking comment.

— With Bloomberg inputs