04/03/2011 - 11:47

Indian firm completes $750m Griffin buy

04/03/2011 - 11:47

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Lanco Infratech says it will increase production at Griffin's coal mines near Collie by a factor of four, after it completed the $750 million acquisition of the assets.

Lanco Infratech says it will increase production at Griffin's coal mines near Collie by a factor of four, after it completed the $750 million acquisition of the assets.

Lanco in December agreed to buy the thermal coal mine on a four-year payment plan in the largest investment by an Indian enterprise in Australia to date.

The plan includes a $500 million down payment, which includes around $19 million to cover employee entitlements and environmental requirements.

A further $100 million would be due within two years of the deal being accepted, or earlier if approval for a railway line from the Collie operations to Bunbury is granted.

And an additional $150 million would be payable within four years, or earlier if coal is exported from Bunbury.

Griffin Coal was placed in the hands of administrators KordaMentha in January 2010 after missing deadlines for the payment of debt instalments and tax liabilities, and was chaired by reclusive multi-millionaire Ric Stowe.

The transaction does not include Griffin's Bluewaters power stations.

Lanco is a New York and Bombay stock exchange listed infrastructure company that will likely send coal from the operation to its power stations in India.

Lanco chairman L. Madhusudan Rao said the company was committed to long-term development of the region beyond the Griffin coal mine.

"We are focused on growing the Griffin coal business and further developing the mining and infrastructure (rail and port) facilities in the region," he said.

"This would include development of additional facilities at Bunbury port, and ramping up mine production by four-fold to above 15 million tonnes per annum.

"Lanco also plans to develop or strengthen the rail corridor between the Collie coal mine and Bunbury, which would also fulfil the enhanced need of cargo movement around the region."

Lanco is understood to have beaten rival bidders from Japan and China.

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