Nov. 8 (Bloomberg) -- GVK Group, which runs airports, roads and power plants in India, plans to sell a minority stake in Australia’s Alpha coal projects, which it bought from Hancock Prospecting Pty as part of a $1.26 billion deal.
The size of the stake has yet to be decided, said A. Issac George, chief financial officer at GVK Power & Infrastructure Ltd., the billionaire G.V. Krishna Reddy-controlled group’s listed entity. GVK bought 79 percent in the Alpha and Alpha West projects in Queensland in September.
GVK is seeking to raise funds to develop the mines and the transport infrastructure that may cost as much as $10 billion. GVK Power expects to begin marketing a $1 billion loan this week to pay for Hancock’s assets, according to a person familiar with the matter.
GVK Power fell as much as 2.9 percent to 13.4 rupees and traded at 13.6 rupees as of 1:02 p.m. in Mumbai, valuing the company at 21.5 billion rupees ($435 million).
At full output, the coal projects may produce 84 million metric tons annually, according to GVK. Production is scheduled to start in 2014 at a rate of 30 million tons of power station coal a year, the company said.
To fund the acquisition, the GVK Group plans to raise $1 billion selling a stake in its GVK Coal Developers (Singapore) Pte. unit in three to six months, G.V. Sanjay Reddy, vice chairman of GVK Power, said Sept. 19. GVK Coal Developers owns the Australian mines jointly with GVK Power.
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