GVK sells 51% in Oz infra projects to Aurizon

GVK sells 51% in Oz infra projects to Aurizon

The deal is expected to expedite the group's $10-billion Hancock coal project in Australia Hyderabad: City-based GVK group, which is developing...

The deal is expected to expedite the group's $10-billion Hancock coal project in Australia gvkHyderabad: City-based GVK group, which is developing $10-billion Hancock coal project in Australia, has on Monday entered into an agreement with Queensland-based rail major Aurizon Holding Ltd for selling 51 per cent stake in rail and port projects there for an undisclosed sum. GVK Coal Infrastructure (Singapore) Pte Ltd, a part of GVK group, and Aurizon have signed a non-binding term sheet to jointly progress the development of rail and port infrastructure to unlock Galilee Basin coal reserves, GVK said in a statement. Under the proposed framework, Aurizon will acquire a majority interest in Hancock Coal Infrastructure Pty Ltd (HCI), which owns GVK Hancock's rail and port projects. It will invest through upfront consideration at completion of the transaction and deferred consideration at financial close of each phase of the projects. Both the companies will have equal management rights and an equal representation on the board and all key committees. However, GVK Reddy, Chairman, GVK Group, will be the Chairman of the Board for the infrastructure arm. In 2011, GVK acquired 79 per cent stake in the Alpha Coal and Alpha West Coal Project and 100 per cent stake in the Kevin's Corner Project, Queensland from Hancock Coal Pty. Ltd. These projects hold estimated reserves of about 8 billion tonne and a capacity of more than 80 million tonne per annum. Besides, GVK also has a 100 per cent stake in the 500-km rail line and a 60 million tonne per annum coal terminal at Abbot Point port as part of the 'pit-to-port' logistics solution. "This is one of the most significant deals in Queensland's coal history. The development of the rail and port infrastructure will unlock the Galilee Basin and see the development of Alpha, Kevin's Corner and Alpha West, creating one of the largest integrated coal development projects globally. I am sure it will be a win-win relationship leveraging on each other's strengths in project development and operation," said GVK Reddy. After the deal, Aurizon will gain the rights to operate and jointly manage with GVK the rail infrastructure and to exclusively provide above rail haulage from GVK Hancock's Alpha and Kevin's Corner mines for up to 60mtpa of coal. Besides, both the companies will also jointly determine the optimum rail solution that may include a combination of GVK Hancock's rail project and Aurizon' s Central Queensland Integrated Rail Project (CQIRP). "The relationship with Aurizon will allow us to jointly develop the most cost and time efficient rail and port solution for the Galilee Basin. At full capacity, the proposed arrangement is intended to provide sufficient equity and debt funding for the projects to reach financial close. The parties jointly will leverage the work already completed by GVK, the significant potential for ECA financing and Aurizon's experience and capacity to undertake major projects and capability in heavy haul rail and infrastructure," said G V Sanjay Reddy, Vice Chairman GVK. The companies said final nod to the transaction will be subject to the satisfaction of a number of conditions including satisfactory due diligence, final Board approvals, third party approvals and negotiation of final terms and definitive documentation. " Aurizon has always believed that realizing Galilee Basin coal exports will require a consolidated rail and port solution that delivers a staged, commercially-sensible solution for producers. This solution could also provide significant opportunity for new and existing Bowen Basin producers to utilize elements of this infrastructure," said Lance Hockridge, Managing Director, Aurizon.
Show Full Article
Print Article
Interested in blogging for thehansindia.com? We will be happy to have you on board as a blogger.
Next Story
More Stories