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Publish Date : 12-Mar-2013

GVK Coal Infrastructure (Singapore) Pte Ltd (GVK Hancock) declared that it has entered into a deal with Aurizon for a joint development of rail and port infrastructure.

The deal will open Galilee Basin coal reserves including GVK Hancock\'s Alpha, Kevin\'s Corner and Alpha West coal mines and a process to support the next phase of coal growth in the Bowen Basin.

As per the deal, Aurizon will buy a majority (51%) stake in Hancock Coal Infrastructure Pty Ltd (HCI), which owns GVK Hancock\'s rail and port projects and will also make investment through upfront consideration at completion of the transaction and deferred consideration at completion of each phase of the projects.

It is stated that the two companies will have equal management rights and an equal representation on the board and all key committees.

Following the acquisition, GVK Reddy will be chairman of the Board.

\"This is one of the most significant deals in Queensland\'s coal history. The development of the rail and port infrastructure will unlock the Galilee Basin and see the development of Alpha, Kevin’s Corner and Alpha West, creating one of the largest integrated coal development projects globally,\" said Chairman GVK Reddy, \"I am sure it will be a win-win relationship leveraging on each other\'s strengths in project development and operation.\"

\"The proposed relationship with Aurizon would allow us to jointly develop the most cost and time efficient rail and port solution for the Galilee Basin,\" said G.V Sanjay Reddy, Vice Chairman, \"At full capacity, the proposed arrangement is intended to provide sufficient equity and debt funding for the projects to reach financial close. The parties jointly will leverage the work already completed by GVK, the significant potential for ECA financing and Aurizon\'s experience and capacity to undertake major projects and capability in heavy haul rail and infrastructure.\"

Lance Hockridge, Aurizon Managing Director & CEO said, \"The proposed Aurizon-GVK Hancock arrangement is a significant milestone because it brings together two advanced, large-scale players in the mine-rail-port space for the Galilee. Aurizon has always believed that realizing Galilee Basin coal exports would require a consolidated rail and port solution that delivers a staged, commercially-sensible solution for producers. This solution could also provide significant opportunity for new and existing Bowen Basin producers to utilize elements of this infrastructure.\"

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