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GVK, Australia’s Hancock extended deadline for mine sale talks

GVK, Australia’s Hancock extended deadline for mine sale talks
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First Published: Fri, May 20 2011. 12 28 PM IST
Updated: Fri, May 20 2011. 12 28 PM IST
Sydney/Mumbai: Australia’s Hancock Prospecting has extended a deadline for exclusive negotiations with GVK Power and Infrastructure over the sale of two of its coal mines until June, sources said on Friday.
The deadline for exclusive talks, which expired earlier in May, has been extended by a month, two sources familiar with the deal told Reuters.
“The talks are progressing very well and we need some more time to put certain issues in place. GVK has already firmed up finances for this,” one of the sources said, adding he expected a decision before the new deadline expired.
GVK is in advanced talks with Standard Chartered and ICICI Bank to fund its possible acquisition of Hancock’s Alpha Coal and Kevin’s Corner mines for around $1.3 billion, sources with direct knowledge of the matter had said last month.
A spokesman for GVK in Mumbai did not return calls for seeking comment. Hancock was not available for comment.
GVK Power may have to arrange an additional $6 billion to $7 billion over a period of five to six years in working capital and other investments, sources have told Reuters previously.
Shares in GVK, valued at about $800 million, were trading 0.5% firmer in Mumbai on Friday.
The original extension expired on 11 May, one source said on Friday, adding that negotiations continued over some of the terms of the deal, including royalty payments.
Indian firms are eyeing coal assets overseas to supply 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.
India holds 10% of the world’s coal reserves but a shortfall in local supplies has grown rapidly with the increase in coal-fired power plants.
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First Published: Fri, May 20 2011. 12 28 PM IST
More Topics: GVK Power | Hancock | Mine | MAs | Stake Sale |