GVK Power to raise $1.2 bn debt for Hancock Assets buy

Bengaluru : GVK Power, a unit of infrastructure major GVK Group, is raising $1.2 billion as debt to part fund its acquisition of Hancock mines in Australia, according to two people familiar with the development. The Hyderabad-based GVK Power has roped in ICICI Bank for syndicating the $1.2 -billion loan and is likely to close the final transaction, estimated to cost about $3.4 billion, in a couple of months, said one of the persons involved in the negotiations . "The loans will carry an interest of 10% and will be completed in the next 2 weeks. The funding will be raised via a special purpose vehicle that will be registered overseas," he added.

The Reddy family-owned GVK Power has been in talks with financial investors such as Standard Chartered and ICICI Bank as well as private equity majors 3i, Actis and Macquaire to raise about $1.5 billion (about Rs 6,800 crore) for acquiring Australia's Hancock Coal. While the company had approached state-run SBI , it could not agree on any loan syndication with SBI.