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BW Businessworld

Flying Low?

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Two months, three deals and Rs 7,750 crore. That's the math of three acquisitions completed by GVK Power and Infrastructure. The big question: where is the money for these acquisitions coming from? In the Hancock deal — where GVK acquired coal mines in Australia — for $1.26 billion (Rs 6,100 crore), the company said it would be funded largely by debt. The other two were buyouts of its partners' stakes in Mumbai and Bangalore international airports (MIAL and BIAL).

For part of the Hancock Coal acquisition, private equity firms paid about Rs 1,500 crore for 25 per cent of GVK Energy, a subsidiary. But for the Rs 1,750-crore airport acquisitions, investment bankers suggest that bank financing through a three-year letter of credit against future airport revenues appeared to have been arranged. Even for Hancock Coal, the company had said it would be debt funded in large part. In today's high interest rate scenario, that sounds like a lot of debt, a lot of interest and perhaps a lot of worry.


Leela Bhansali has signed a contract with a television channel for a soap of 500 episodes. Bhansali, it seems, feels the small screen is a more viable option, after Saawariya (2007) and Guzaarish (2010)

(This story was published in Businessworld Issue Dated 31-10-2011)