GVK may close deal to buy coal assets in Oz next month

Hyderabad-based GVK Power and Infrastructure is likely to sign a multi-billion dollar deal to acquire two coal assets in Australia by next month.

"We will dish out a good news before July-end. However, we can't share details due to no-disclosure agreement," sources in the company said.

GVK Power and Infrastructure, owned by billionaire GVK Reddy, has been negotiating with Hancock for acquiring its two coal assets -- Alpha Coal and Kevin's Corner. The value of the deal is expected to be over $3 billion.

Asked whether the "good news" is related with the buy out of Hancock's assets, they declined to comment saying that the company was bound by non-disclosure agreement.

GVK and Hancock, owned by Australia's richest woman Gina Rinehart, had earlier set the end of May as the deadline for exclusive negotiations, but it was extended subsequently though no reasons were given by any of the two firms.

Located in Galilee basin of Queensland province, these assets have an estimated 7.6 billion tonnes of thermal coal reserves, which could be mined for around 30 years.

Sources said the required infrastructure for the two coal assets on the block is not yet ready and GVK would have to invest a lot to put them in place.

GVK has 900 MW power generation capacity now. Work to add 4,000 MW capacity, including 1,860 MW thermal power project in Punjab, is at various stages of completion.

The company hopes to take its power generation capacity to 10,000 MW in the next 3-5 years.