GVK Coal Infrastructure (Singapore) and rail freight firm Aurizon have signed a non-binding term sheet to jointly develop rail and port infrastructure in Australia, a move that will see Aurizon buy a 51 per cent stake in Hancock Coal Infrastructure, which owns the GVK Group’s Hancock rail and port projects in Queensland.
The framework is aimed at unlocking the Galilee Basin coal reserves including GVK Hancock’s Alpha, Kevin’s Corner and Alpha west coal mines besides a process to support the next phase of coal growth in the Bowen basin. Accordingly, Aurizon would acquire a majority (51 per cent) interest in Hancock Coal Infrastructure Pty Ltd. The value of the transaction, however, was not disclosed.
Aurizon would invest through upfront consideration at completion of the transactions and deferred consideration at financial close of each phase of the projects. The two companies would have equal management rights and equal representation on the board and key committees, with GVK Reddy being the chairman of the Board.
“It will be a win-win relationship and leverage on each other’s strengths in project development and operation,” Mr. Reddy said.
GVK, in 2011, acquired 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 held an estimated reserve of about 8 billion tonnes and capacity of more than 80 million tonnes a year.
