India’s Lanco outbids Chinese rivals to bag Australia’s Griffin for $850 mn

Infrastructure and power generation company Lanco Infratech has outbid Chinese and Japanese rivals to acquire Australia's Griffin Coal, for around A$850 million (3765.5 crore), making it to be India's second-largest investment in the Australian coal sector.

The biggest investment by an Indian company in Australia's coal sector was made in August this year by diversified conglomerate Adani Enterprises, when it acquired a 100-per cent stake in the Galilee coal block in Queensland from Linc Energy Ltd, for around $2.68 billion (A$2.94 billion). (See: Adani bags $2.7-billion deal to acquire Australian coal mine)

Griffin Coal, one of Western Australia's biggest privately-held companies went into administration this January after it missed A$25 million in debt and tax payments due to be made on 31 December 2009.
 
The acquisition was announced yesterday by administrator KordaMentha, who had said that the company had about $700 million in debt, including $475 million in unsecured debt to US bondholders.

According to Mentha Lanco had agreed to buy Griffin's coal assets that includes its Collie coal mines, located approximately 220kms south east of Western Australia's capital city, Perth, but not the company's Bluewaters power stations, which will be sold in a separate process next year.

Hyderabad-based Lanco is said to have offered around A$800-$850 million, making its bid superior to four other bidders, including Chinese and Japanese companies.

Lanco said that it will expand the capacity of the mines and export the coal to India for use in its power stations. According to analysts, Lanco will have to spend around $500-700 million on development in order to enhance production to over 15 million tones annually.