GVK Power & Infrastructure today said it was looking at Australian as well as international banks for raising funds to make investment of about $6-7 billion in coal assets that it was acquiring from Hancock.
"We will tap Australian banks for funds and we will tap international banks. Indian banks, I really don't know if they would like to take non-recourse finance risks in a country which is other than India.
"I think possibly, they will shy away a little bit, but European and Australian banks [for project finance] these are the targets are far as debt is concerned," GVK Power's Chief Financial Officer Issac George said.
Last week, GVK Power, part of diversified GVK group, said that it would acquire coal assets and related logistics in Australia from Hancock for $1.26 billion.
"Typically what happens is that the $6-7 billion what I talked about will be funded in a debt-equity ratio of 30:70. So, $1.8 billion will be in equity and $4.2 billion will be debt," he noted.
George said GVK had already tied up finances to fund acquisition of Hancock assets.
"Indian banks have funded it. I cannot name them. They were very particular that their names should not come out. So there are four big Indian banks that had actually funded this," he added.
According to him, a Indonesian coal company is in talks with GVK Power for partnership to jointly develop the mines in Australia.
"But we have not taken a call because we have too many options with us at this moment. So we will evaluate this.
"I just want this transaction [Hancock deal] to be closed. After that we will have ample time of 18 months for financial closure," George noted.
Hancock coal assets have resources to the tune of 7.9 billion tonne and would help in providing GVK group with fuel supplies for its proposed power projects in India.
GVK would acquire 79% stake in Alpha Coal as well as Alpha West Coal projects located in Queensland, Australia, while the 21% would be retained by Hancock Propsecting Pty Ltd.
Further, it would buy out Kevin's Corner Coal project and proposed rail and port projects, related to these coal assets.