The Hindu Business Line : Coal Ventures completes due diligence of 2 Mozambique blocks

Global plans
Coal Ventures invites expression of interest from investment bankers to help acquisitions in Australia, Canada, the US, Indonesia, Mozambique, Zimbabwe, South Africa.
The company has a $2.7-billion fund for the acquisitions, of which $1.8 billion is in debt and the rest $900 million is in equity.

Pratim Ranjan Bose

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Kolkata, Feb. 18 Coal Ventures International (CVI) – an SPV floated by Coal India, SAIL, Vizag Steel, NTPC and NMDC for acquisition of coal blocks overseas – has completed due diligence of two Mozambique blocks on offer. The joint venture is also planning to appoint a global investment banker shortly for acquisition of metallurgical and thermal coal assets.

Sources in Coal India told Business Line that a CVI delegation had visited Mozambique in January and completed due diligence in two blocks.

“One of the blocks offered does not have commercially exploitable resources. The other block has some coal reserves. Our technical team is evaluating the same. The report will be up for discussion before the steering committee of CVI in end February,” a source said.

“This was our first acquisition attempt in Mozambique. We are successful in acquiring the geological model of coal reserves and their nature and exact locations in Mozambique. This will help us in future to assess the opportunities available in that country more efficiently,” the source said.

On whether the joint venture will acquire the block where it had found “some coal”, the source said that the steering committee would take a call on the same in its meeting scheduled later this month.

Meanwhile, to further accelerate its attempt to acquire coal blocks overseas, Coal Ventures has recently invited expression of interest from investment bankers to help acquisitions in Australia, Canada, the US, Indonesia, Mozambique, Zimbabwe, South Africa and others.

The joint venture has created a $2.7-billion fund for the acquisitions. Of the total, $1.8 billion is in debt and the rest $900 million is in equity. The eligible investment banker is expected to have global footprint and strategic or private equity investment in listed and unlisted coal companies in the target countries.

The appointment of the investment banker may be finalised by the joint venture later this month.

CIL and SAIL hold 28 per cent stake each in Coal Ventures. The rest is held by Vizag Steel (RINL), NTPC and NMDC.

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