GVK Group is planning to raise upto $1Bn by selling stake in Singapore based energy unit - GVK Coal Developers (Singapore) Pte Ltd. These funds will be used to repay the debts being raised for the Hancock deal.

GVK-Hancock Deal Structure:

The acquisition will be made through GVK Coal Developers (Singapore) Pte Ltd. GVK Power the flagship company of the group will acquire $10% stake in GVK Coal for $30Mn. It will have an option of increasing the stake to 49%. The other 90% of GVk Coal is held by GVK Natural Resources, a group firm.

GVK Group acquire 79% in Alpha and Alpha West projects in Queensland's Galilee Basin.

It will acquire full ownership of Kevin's Corner Coal Project adjacent to Alpha.

It will acquire full ownership of the rail and port project connecting the mines to the Abobot Point port.

Payment Structure:

GVK will pay $500Mn upfront, followed by $200 million one year from the deal closing. It will pay an additional $560 million after the financial closure of the project, expected to be in 2012.

GVK is raising $1Bn from a number of banks to finance the deal(Link to our Article).

The security for this loan comprises the assets of the Hancock mines and security provided by GVK Natural Resources and GVK Power in 51:49 ratio

GVK will pledge its stake in GVK Energy and Transportation to secure equity requirements and debt

Ernst & Young LLP are the financial advisors to GVK.

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KVEZAR VIEW

  DEAL TRACKER FOR

Date	Transaction	Type	Buyer	Size ($mn)
20/09/11	GVK Group - GVK Coal - Fund Raising	M&A	Looking For	913.52

 

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