GVK Coal, a step down subsidiary of GVK group, in 2011 acquired a 79 per cent stake in the Alpha Coal and Alpha West Coal Projects and 100 per cent stake in the Kevin's Corner Project, Queensland from Hancock Coal Pty. Ltd.
The group has made investments aggregating to Rs 333 crore by way of advances, subscription of shares and share application money and provided guarantees and commitments aggregating to Rs 6,534.5 crore to lenders of GVK Coal as on March 31, the annual report stated.
The company attributed falling coal prices, since the acquisition of stake in Australian coal mines, to mounting of debt.
"Management believes that GVK Coal would be able to establish profitable operations, meet its obligations, and its current liabilities being in excess of current assets is temporary situation and will not impact ability of the company to continue in operation in foreseeable future and accordingly will not have any material adverse impact upon operations and cash flows of the company, the company hoped.
"GVK coal is also in discussion with non-controlling shareholders realign the option exercise dates and additional funding from potential investors," the report said.
The Alpha Coal with billion of tonnes of coal reserves has received most of the clearances from the Australian federal government and GVK has signed a non-binding agreement with Aurizon for Rail and Port infrastructure development.