Hyderabad: India's infrastructure major GVK Power and Infrastructure Ltd expects to achieve financial closure for its $10 billion integrated coal, rail and port project in Australia by March 31, 2013, its Vice Chairman G V Sanjay Reddy, said.
"We expect to tie up finances for the project by first quarter of the next calender year," Reddy said at a press conference Sunday.
Earlier in September 2011, GVK bought a controlling equity stake in Australia's Hancock Coal Pty Ltd for $1.26 billion, which is said to be one of the largest overseas acquisitions by an Indian infrastructure entity, through Singapore-based group company GVK Coal Developers (Singapore) Pte Ltd.
Accordingly, GVK Power acquired 79% stake in Hancock's Alpha Coal and Alpha West Coal Projects and 100% in Kevin's Corner Coal project, besides proposed rail and port projects related to these coal assets.
The infrastructure major plans to raise about $7.5-$8 billion through debt and pool in the balance as equity to fund the project.
"For typical coal mine like this we are targeting 30% equity (and 70% debt). For railway and port, both are dependent on the cash flow you receive. So there we may go for between 15% and 20% equity. Out of the total cost of $10 billion, banks will fund around $7.5 billion to $8 billion," Reddy said.
The company is looking to raise about 70% of debt from export credit agencies of various countries.
"We will be raising the balance from commercial banks which will be around a $1 billion to $1.5 billion," he said.
Meanwhile, Gina Rinehart, one of the world's richest women who has 21% equity stake in the project, said that the project is expected to receive environmental clearances from the Australian Government by end of July or early August.
Moreover, she also evinced interest to raise her stake holding in the project if the need arises. GVK had received environmental clearance from the Queensland government, but the approval process was stalled by the central government on June 5 on grounds that the earlier assessment lacked information.
GVK has roped in Australia and New Zealand Banking Group Ltd as its financial adviser for finding suitable investors and bankers for the project.