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GVK Power in advanced talks with Hancock Prospecting

GVK Power in advanced talks with Hancock Prospecting
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First Published: Thu, Feb 17 2011. 06 45 PM IST
Updated: Thu, Feb 17 2011. 06 45 PM IST
Mumbai: GVK Power and Infrastructure, which has been scouting for coal mines for the past two years to fuel its power plants, is in advanced talks to buy a coal mine owned by Australia’s Hancock Prospecting, three sources with direct knowledge told Reuters on Thursday.
The company has offered about $2.25 billion for Kevin Corner mine in Queensland State, said the sources, who declined to be named as the details of the talks were not public yet.
The final bid amount could differ as the Australian firm is yet to conclude the bid, they said. GVK Power , which focuses on energy and transportation projects, has hired Ernst & Young as a transaction advisor to the deal. An in-house team is handling the acquisition, one of the sources said.
When contacted, a GVK Power spokesman declined to comment, while Hancock Prospecting could not be immediately reached.
Earlier, GVK Power had bid to acquire Australia’s Griffin Coal, which was later acquired by Indian rival Lanco Infratech .
Indian firms are eyeing coal assets overseas to fire up power plants in India, looking to benefit from the energy-hungry nation’s aim to halve its nearly 14% peak-hour power deficit within two years.
In Sept 2010, GVK Power and Lanco Infratech executives told Reuters at its annual India Summit that they are searching for coal assets in Indonesia, Australia and Africa.
Kevin Corner is estimated to have coal reserves of around 4.3 billion tonnes, according Hancock’s website.
The mine currently has a capacity to produce 30 million tonnes a year and is likely to be productive for the next 30 years.
Media reports had earlier stated that India’s Lanco Infratech was also bidding for Hancock’s mine, a move that was denied by the infrastructure developer.
GVK Power and Infra’s shares closed 0.35% lower at Rs28.60 on a Mumbai market that closed up 1.13% on Thursday.
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First Published: Thu, Feb 17 2011. 06 45 PM IST