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GVK to tap Australian, international banks for $4 billion debt

23 Sep 2011 Evaluate

GVK Power & Infrastructure is likely to raise funds to make investment of about $6-7 billion in coal assets that it was acquiring from Hancock. It is aiming at Australian as well as international banks for raising the funds.

Earlier last week, GVK Power, part of the GVK Group has agreed to acquire Australia's Hancock Coal for $1.26 billion, in one of the largest overseas acquisitions by an Indian infrastructure entity. This deal includes acquiring majority holding in coal resources and railway line and port infrastructure projects of Hancock Coal. It is reported that an Indonesian coal company is also in talks with GVK Power for partnership to jointly develop the mines in Australia.

Hancock coal assets have resources to the tune of 7.9 billion tonne and would help in providing GVK group with fuel supplies for its proposed power projects in India. The company is going to be funded in a debt-equity ratio of 30:70. So, $1.8 billion will be in equity and $4.2 billion will be debt. GVK had already tied up finances to fund acquisition of Hancock assets. 

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