Griffin Coal, the Australian subsidiary of Indian infra giant Lanco, is set to get 50 million Australian dollar as an upfront payment from Bluewaters Power in January towards long-term coal supply agreement, a senior Lanco Group offical said.
Chief Financial Officer of Lanco Infratech T Adibabu said the amount would help Griffin Coal to meet its financial requirements for the next seven to eight months.
"The agreement with Bluewaters will help the Griffin Coal operate on its own. The company will get 50 million Australian dollar cash as upfront fee between January 15 and 20," Adibabu told PTI.
The Supreme Court of Western Australia last week gave its nod to the Griffin Coal to enter into a revised Coal Supply Agreement (CSA) with the Bluewaters power which is set to be sold to a Japanese consortium of Sumitomo Corp and Kansai Electric Power Co for an enterprise value of around $ 1.2 billion.
Under the agreement, Griffin Coal will supply 1.8 million tonnes of coal for over 25 years to Bluewaters Power Station. The agreement with Bluewaters will fetch Griffin coal additional amount of 150 million Australian dollar (in NPV terms) for the entire course of the agreement including
about 50 million Australian dollar upfront, a senior Lanco Group official earlier had said.
Griffin Coal Mining Company which was taken over by Lanco for 730 million Australian dollar in March last year is dependent on the parent company for working capital requirements.
"Griffin Coal, which is depending on its parent company Lanco for working capital requirements, can operate on its own for next seven or eight months without any funding requirement," Adibabu said.
James Riordan Company Secretary and Chief Financial Controller of Griffin Coal in an affidavit to the Australian court said the coal miner forecasts that for the year ended November 30, 2013, it will be cash positive by around 80 million Australian dollar on a stand-alone basis based on the agreements with Bluewaters and future agreement with other companies.
Lanco India made 132 million Australian dollar of funds available to Griffin Coal from July 2011 to October 2012, approximately 10 million Australian dollar per month.
