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04-18-2012, 09:49 AM #1
GVK looking to offload stake in Australia's Hanc'ock Coal mines
GVK group is looking to sell part of its stake in Hanc'ock coal mines in Australia to raise funds for development of the Australian assets that require an investment of $10 billion in the first phase.
"Certainly, we are looking at selling the stake. But we do not want to disclose too much about the project right now because it is owned by a private company (of the group)," GVK's Vice Chairman GV Sanjay Reddy said on the sidelines of CII's annual general meeting.
In September last year, the Hyderabad-based group had acquired Hanc'ock Coal for about $1.26 billion (nearly Rs 6,000 crore) through GVK Coal Developers and GVK Power and Infrastructure Ltd (GVKPIL).
GVK Coal, a Singapore-based privately held group firm, owns 90 per cent stake in Hanc'ock, while GVKPIL, listed arm of the group, owns remaining 10 per cent.
According to Reddy, the Hyderabad-based group has been approached by various investors for a potential stake in Hanc'ock that holds coal reserves of 7.9 billion tonnes.
"It will cost us $10 billion in the first phase of development. So, we are looking to raise equity and debt both, including selling stake in GVK Coal. But, right now we want to keep it (the stake sale plans) with ourselves," he said, while declining to comment further.
A senior official of the group had said just a few days after the deal announcement that GVK is likely to invest $6 billion in Hanc'ock's first phase of development through a debt-equity mix of 70:30, besides divesting stake.
"Our contribution, after divesting stake in GVK Coal, would be around $6 billion. This will be funded through debt-equity ratio of 70:30, so our equity contribution would be about $1.8 billion," Chief Financial Officer of GVK Power and Infrastructure, Issac George had said.
As per the deal announcement, GVK Group has 79 per cent stake in Hanc'ock's Alpha Coal and Alpha West Coal projects located in Queensland, Australia. Besides, it owns Kevin's Corner Coal project and proposed rail and port projects of Hanc'ock related to the assets.
The Hanc'ock assets, estimated to hold reserves of 7.9 billion tonnes, are likely to begin production in 2015 at the rate of 30 million tonnes per year (MTPA). The production can be increased to 84 MTPA as the development of assets progresses.
"We have got most of the regulatory approvals and one final approval we need to move ahead with the development plans," Reddy said.
GVK has already announced plans to develop 7500 MW power generation capacity in India through the coal shipped from the Hanc'ock venture.