GVK to finalise Hancock coal mine buyout in two months

GVK Power may finalise a deal to buy coal mines operated by Australia’s Hancock Prospecting in two months, GVK Group Chairman GVK Reddy said.

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. 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 US $1.2 billion in debt to part-fund its acquisition of Hancock mines in Australia, with the final transaction estimated to cost about US $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.