International Coal Ventures (ICVL), a special purpose vehicle created by five giant PSUs to buy coal assets abroad, has set a target of acquiring at least one such property by 2011-12. Created by sharing holding between NTPC, Coal India, NMDC, Steel Authority of India and Rashtriya Ispat Nigam, ICVL is scouting for opportunities in four countries — Australia, Mozambique, the US and Canada.
“ICVL has set a target of buying a coal property by 2011-12. It should preferably be a 5 million-tonne asset,” PK Bishnoi, chairman and managing director of RINL and executive president of ICVL, told ET. “The idea is to get access to properties with estimated reserves of around 500 million tonnes,” he added.
The SPV has bid for a coking coal property in Mozambique after initial survey of the asset. Incidentally, Mozambique has one of the largest reserves of thermal and coking coal in the world. “The latter, however, has asked for certain clarifications with regard to the bid,” a source said.
ICVL can garner a kitty of nearly Rs 10,000 crore to fund its acquisitions, if it decides to leverage its equity base of Rs 3,500 crore. The war chest could be enlarged further to Rs 25,000 crore. To a specific question on the size of a potential deal, the source added: “There is no fixed price budget. Rather, it would depend on the market price prevailing at the time of the acquisition.”
Incidentally, the global economic downturn has led to a situation where sellers are using every opportunity to delay finalisation of potential deals in the hope of an improvement in asset valuations. ICVL has shortlisted some ten merchant bankers who are advising the company on potential acquisition targets. “Depending on their interests, offer and expertise, we are in talks with them on potential target assets,” the source added.
Source: Economic Times
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