The GVK group has confirmed arrangements for the acquisition of a strategic part of large coal resource and infrastructure development project from Hancock Prospecting in Queensland, Australia for $1.26 billion.
The group sees this furthering its strategic interests in the natural resources and energy sectors.
The consideration for the acquisition is $1.26 billion to be paid in a phased manner to the Hancock Group with $500 million payable now at closing. Of the balance amounts, $200 million will be paid one year from closing and $560 million will be paid on financial close for the project (anticipated to be in 2012) but in any event, no later than three years from closing.
The funding for the acquisition is tied up with banks. The financing documents for funding the acquisition are being executed with the banks and the transaction is expected to close and assets transferred in about two weeks.
The Chairman of GVK Group, Dr GVK Reddy, in a statement said, “We are excited about closing this transaction. These are truly world class coal assets in both quality and scale and we look forward to the opportunity of jointly developing these projects to their full potential. The GVK Group and the Hancock Group wish to secure long-term relationship through this joint participation and in order to strengthen this relationship, the GVK Group has invited Georgina Hope Rinehart to join the board of GVKPIL as a non-executive director.”
Ms Rinehart, Chairman, Hancock Group, said, “The immediate focus will be to progress the Alpha Coal Project and the associated port and rail projects to financial closure by 2012 and to complete the BFS for Kevin’s Corner and continue drilling to increase the size of the known resource. GVK has already seen significant interest in this project from global strategic and financial investors, who wish to take an equity stake in these projects.”
The coal project consists of a 7.9 billion tonnes compliant with Australia's Joint Ore Reserves Committee (JORC) resource categorisation, with 3.3 billion tonnes reserves. The infrastructure project involves the development, ownership and operation of an integrated infrastructure development consisting of a 495 km rail line and a 60 million tonnes a year port at Abbot Point.
The total investment in the first phase is estimated at approximately $10 billion. This includes capital expenditure on the mines, rail line and port.
Most of the coal from the project is intended for delivery into the Asian region as Letters of Intent for approximately 45 million tonnes per annum have already been signed or are in the process of finalisation with major utility companies in China, Japan, Korea, Taiwan and Vietnam.
The group sees this furthering its strategic interests in the natural resources and energy sectors.
The consideration for the acquisition is $1.26 billion to be paid in a phased manner to the Hancock Group with $500 million payable now at closing. Of the balance amounts, $200 million will be paid one year from closing and $560 million will be paid on financial close for the project (anticipated to be in 2012) but in any event, no later than three years from closing.
The funding for the acquisition is tied up with banks. The financing documents for funding the acquisition are being executed with the banks and the transaction is expected to close and assets transferred in about two weeks.
The Chairman of GVK Group, Dr GVK Reddy, in a statement said, “We are excited about closing this transaction. These are truly world class coal assets in both quality and scale and we look forward to the opportunity of jointly developing these projects to their full potential. The GVK Group and the Hancock Group wish to secure long-term relationship through this joint participation and in order to strengthen this relationship, the GVK Group has invited Georgina Hope Rinehart to join the board of GVKPIL as a non-executive director.”
Ms Rinehart, Chairman, Hancock Group, said, “The immediate focus will be to progress the Alpha Coal Project and the associated port and rail projects to financial closure by 2012 and to complete the BFS for Kevin’s Corner and continue drilling to increase the size of the known resource. GVK has already seen significant interest in this project from global strategic and financial investors, who wish to take an equity stake in these projects.”
The coal project consists of a 7.9 billion tonnes compliant with Australia's Joint Ore Reserves Committee (JORC) resource categorisation, with 3.3 billion tonnes reserves. The infrastructure project involves the development, ownership and operation of an integrated infrastructure development consisting of a 495 km rail line and a 60 million tonnes a year port at Abbot Point.
The total investment in the first phase is estimated at approximately $10 billion. This includes capital expenditure on the mines, rail line and port.
Most of the coal from the project is intended for delivery into the Asian region as Letters of Intent for approximately 45 million tonnes per annum have already been signed or are in the process of finalisation with major utility companies in China, Japan, Korea, Taiwan and Vietnam.
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