Infrastructure developer GVK group, which is developing $ 10 billion Hancock coal project in Australia, on Monday said it signed a pact with rail freight firm Aurizon to sell 51 per cent stake in its rail and port projects.
Under the proposed framework, Aurizon would acquire the stake in Hancock Coal Infrastructure Pty ltd (HCI), which owns GVK Hancock's rail and port projects and would invest through upfront consideration at completion of the transaction and deferred consideration at financial close of each phase of the projects.
Financial details of the investment were not disclosed.
GVK Vice-Chairman G V Sanjay Reddy said at full capacity, the proposed arrangement is intended to provide sufficient equity and debt funding for the projects to reach financial closure.
These projects comprise a greenfield rail project and a development right for a coal terminal at Abbot Point.
Both the companies will have equal management rights and an equal representation on the board and all key committees.
The Chairman of the Board will be GVK Reddy chairman GVK Group, the statement said.
GVK had, in 2011, acquired a 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 tonnes and a capacity of over 80 million tonnes per annum.
GVK also has a 100 per cent stake in the 500 km rail line and a 60 million tonne per annum port as part of the ‘pit-to-port’ logistics solution which envisages an investment of $ 10 billion.Terming the agreement with Aurizon as one of the most significant deals in Queensland's coal history, GVK Chairman G V Krishna Reddy said 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.
“I am sure it will be a win-win relationship leveraging on each other's strengths in project development and operation,” Reddy said in the statement.
lance Hockridge, Aurizon Managing Director and CEO said the proposed Aurizon-GVK Hancock arrangement is a significant milestone because it brings together two advanced, large-scale players in the mine-rail-port space for the Galilee.
GVK Hancock and Aurizon would jointly manage the proposed rail and port projects. These projects comprise a greenfield rail project and a development right for a coal terminal at Abbot Point.GVK Hancock received the primary State and Commonwealth environmental approvals for its greenfield rail project in May and August 2012