Thursday, 07 Jul 2011
India's GVK Power a unit of infrastructure major GVK Group which had inked a deal to purchase two of Hancock Prospecting's thermal coal mines in Australia for around USD 2.4 billion, is set to raise USD 1.2 billion as debt to part fund its acquisition.
The Hyderabad based GVK Power has roped in ICICI Bank to syndicating the USD 1.2 billion loan. Sanjay Reddy, vice chairman of GVK, signed an agreement with Gina Rinehart, chairman of Hancock, earlier in June.
For some months now, Indian billionaire GV Krishna Reddy controlled GVK Power and Infrastructure was inching closer to its buyout of Hancock's two mines in the Galilee basin in Australia.
Analysts tracking the stock said the valuations were very stretched. Mr Ganesh RS corporate analyst with a broking firm said that “Though these are good quality flagship coal mines owned by Hancock, GVK may over leverage itself with this buyout.”
Officials, however, said the acquisition is critical to GVK group's plans to expand its power generation capacity of 901 megawatts to 10,000 megawatts by 2013.
(sourced from Mineweb.com)
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