GVK Group on Monday said it will sell 51% stake in its rail and port projects being developed as part of its $10 billion Hancock Coal project in Australia to Aurizon for an undisclosed sum. Both companies have already signed a pact in this regard.
As per the agreement, Aurizon will acquire the stake in Hancock Coal Infrastructure Pty Ltd (HCL), the holding firm of GVK Hancock’s rail and port projects and will invest through upfront consideration at completion of the transaction and deferred consideration at financial close of each phase of the projects.
GVK Hancock and Aurizon would jointly manage the proposed rail and port projects, which includes a greenfield rail project and a development right for a coal terminal at Abbot Point. Both companies will have equal management rights and an equal representation on the board and all key committees. GVK Reddy, Chairman GVK Group will preside as Chairman of the board.
According to Reddy, 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.
“At full capacity, the proposed arrangement is intended to provide sufficient equity and debt funding for the projects to reach financial close,” said G V Sanjay Reddy, Vice Chairman, GVK.
GVK Hancock received the primary state and Commonwealth environmental approvals for its greenfield rail project in May and August, 2012 respectively.
It may be mentioned that in 2011, GVK had acquired 79% stake in the Alpha Coal and Alpha West Coal Project and 100% stake in Kevin’s Corner project, Queensland from Hancock Coal Pty Ltd, which are estimated to have reserves of about 8 billion tonnes and a capacity of over 80 mt per annum.