The Hindu Business Line : GMR to pick up 50% in S African coal mine

After making an international foray in the aviation sector in March by bagging the Sabiha Gokcen Airport project in Istanbul, Turkey, the Bangalore-based GMR Group has struck a deal with the South African coal mine company Homeland Mining and Energy SA (Pty).

Incidentally, this marks the global foray for GMR Energy, which picked a major stake. Besides being a source for its energy initiatives back home, the stake in the South African company would act as a ‘launch-pad’ for such initiatives globally. On Thursday, the GMR Group announced it picked 5 per cent in Homeland Energy for $15 million. “We have an option of acquiring an additional 5 per cent by May 1 and 40 per cent in the South African company by September,” Mr Raaj Kumar, Chief Executive Officer, GMR Energy, told Business Line.

When it comes through, GMR Energy would have 50 per cent in the South African company with a total consideration of $155 million.

Funding options

Asked about raising funds for the stake acquisition, Mr Raaj Kumar said, “We still have six months time. We will vie for good funding options.”

Homeland Mining and Energy is a subsidiary of the Toronto-based Homeland Energy Group. The GMR’s transaction is related to the projects and properties such as Kendal Mine, Eloff coal mining project. It, however, excludes Homeland Energy’s corporate interests in Homeland Uranium and Altona Resources.

For GMR, it is not just another deal. While it ensured fuel security for the group’s power projects in India, the company hoped that it would act as a launch-pad to propel it into coal-based initiatives globally, said Mr B.V.N. Rao, Chairman (Energy).

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