BackGVK plans to sell Aussie stake, shares jump
GVK plans to sell Aussie stake, shares jump
PremiumFile photo of G.V. Krishna Reddy, chairman and managing director of GVK Power & Infrastructure Ltd.. Bloomberg
Mumbai/Sydney: India’s GVK Power and Infrastructure plans to sell a minority stake in its Australian unit to raise funds to retire part of its debt and fund operations, three sources with direct knowledge of the matter told Reuters.
Shares of the company, which are down 74.1% so far in 2011, jumped as much as 5.23% on the news before closing up 4.76% at Rs11.
A GVK spokesman said the information was speculative and declined to comment.
A Citigroup spokesman did not immediately return a phone call seeking comment, while Macquarie declined to comment.
“(The buyer) could be one or more private equity investors or a strategic partner, or even a combination of both," said one source with direct knowledge of the sale process.
GVK said in September that it would pay $1.26 billion for a majority stake in three Australian coal mines and a port and rail project owned by Hancock Group to secure long-term coal supplies for the group’s power projects.
In 2010, GVK raised about $226 million from 3i Group Plc , which invested in its energy unit, GVK Energy.
With equity markets near two-and-half-year lows, Indian companies are finding it difficult to raise funds.
About $7 billion of public share offerings have been either called off or deferred this year, according to data from SMC Global, making India one of the toughest markets for fund raising.
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