India’s GVK to sell minority stake in Australian business

Sources told Reuters that Citigroup and Macquarie have been hired to help GVK raise $300-500 million through the sale. Shares in the Indian company, which are down 74.1% year-to-date, closed up 4.76% in response to the news.

GVK acquired its Australian mining assets from Hancock earlier this year in a $1.3 billion deal. It was reported at the time that talks were underway with several global financial institutions, including private equity firms, over the sale of minority interests.

The mines in Queensland's Galilee Basin have the capacity to produce 85 million tons of coal per year, but analysts say that at least $10 billion needs to be spent on mine, rail and port infrastructure. Galilee Basin reserves were considered unviable for development until a few years ago because of their remote location. However, rising thermal coal prices have made the reserves a more attractive investment proposition.

GVK already has private equity investors in other parts of its business. Last year, 3i Group committed $182 million to GVK Energy, leading a $272.3 million round of funding that included Actis and Government of Singapore Investment Corp.

It was reported in August that GVK was considering private equity funding for its roads business. The company is also said to be in talks with PE players interested in a 26% stake in GVK Power & Infrastructure, the largest stakeholder in the Mumbai and Bangalore airports.

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• Topics
• South Asia
• Australasia
• Infrastructure
• Industrials
• India
• Australia
• Commodities
• Infrastructure
• Actis Capital
• 3i Asia Pacific
• GIC Private