GVK may finalize deal with Australia’s Hancock in two months

GVK may finalize deal with Australia’s Hancock in two months

Hyderabad: GVK Power and Infrastructure may finalize a deal to buy coal mines operated by Australia’s Hancock Prospecting in two months, GVK Group chairman G. V. K. Reddy said here on Sunday.

The GVK Group is at an advanced stage of talks with Gina Rinehart, the chairman of Hancock, to buy the coal mines belonging to the latter in Australia.

“It will not be any negative (outcome). It will take one or two months (to announce). Very soon, we will come out with the deal," Reddy told media persons on the sidelines of a function of India Infrastructure Finance Company.

As there is a confidentiality agreement between the two groups he could not reveal more details on the financials of the buyout deal.

According to reports, GVK Power -- a GVK Group company -- may raise $1.2 billion in debt to part-fund its acquisition of Hancock mines in Australia, with the final transaction estimated to cost about $2.4 billion.

Hancock’s Alpha Coal and Kevin’s Corner mine are located in Australia’s Queensland province and have an estimated 7.6 billion tonnes of thermal coal reserves.

The GVK group is also reportedly in talks with Middle East-based MEC Coal to buy a coal mine in Indonesia.

Both the companies are said to be in advanced talks and are working out the valuation of the coal mine.

Meanwhile, Reddy said India Inc will meet finance minister Pranab Mukherjee in the coming days to discuss issues related to economy and industry.

Corporate bigwigs like Tata Group’s Ratan Tata, RIL’s Mukesh Ambani, Reliance ADAG’s Anil Ambani, Godrej Industries’ Adi Godrej and G. M. Rao of the GMR Group, besides Reddy, will meet the finance minister.

“It is a closed meeting and the meeting is on the problems being faced by the industry and economy. They would like to know what the bottlenecks are. The country’s GDP has to come into double digits like China," Reddy explained.

Relying to a query on the Navi Mumbai Airport project, which is supposed to be put up for tendering, he said GVK is keen to bid, but has to wait for the government to finalize a concrete proposal.

“We have the first right to refusal. Delay is from the government side. Maybe in a few months, it may come out," Reddy said.