Around $1.2 bn loan backs GVK's Hancock mines buy: Report

Around USD 1.2 billion loan will be provided by banks to back GVK Power & Infrastructure Ltd's proposed acquisition of the Alpha Coal and Kevin's Corner coal mines owned by Australia's Hancock Prospecting, banking sources said, Basis Point reported on Friday.

The top-level group of banks is still being finalised but so far includes ICICI Bank, Axis Bank, Bank of Baroda and Bank of India, the sources said.

One or two other lenders are also expected to form part of the group, potentially including a foreign bank, a source said. ICICI has been involved since early discussions on the financing.

The loan, which would be drawn down in several stages, may be launched later to general syndication.

"StanChart was initially a strong contender" but dropped out of the negotiations, a source familiar with the matter said.

Two potential structures for tenor are currently being considered, the source added. Another source referred to a potential total tenor of 10 years.

GVK is close to finalising the deal, Reuters reported earlier today, citing a newspaper report which said the company had agreed to pay USD 2.2 billion for the mines, including USD 900 million to develop transport infrastructure to carry the coal to a port.

The two companies have been in talks on the purchase since February this year.