* Puts minority stake in Singapore arm on the block
* Singapore sovereign fund GIC in talks with GVK-sources
(Adds details, background, share price)
By Indulal PM and Ketan Bondre
MUMBAI, June 19 India's GVK Power and
Infrastructure is seeking to raise $500 million to
$600 million by selling a stake in its Singapore arm and is in
talks with Government of Singapore Investment Corp for
a potential deal, two sources with direct knowledge of the
The Indian developer of airports, power projects, roads and
mines will sell a minority stake in GVK Coal Developers
(Singapore) Pte Ltd, the sources said, adding that a deal may be
a precursor to a Singapore listing of the unit that holds coal
assets in Australia.
The sale will help fund the huge capital spending needed to
develop the mines in Australia and reduce debt linked to the
$1.26 billion purchase last year.
GVK Power is looking to sell a stake in GVK Coal Developers
as soon as possible, Group CFO Issac George said on Monday,
declining to identify prospective investors or the potential
size of a deal.
"There are people who have approached us, who have shown
tremendous amount of interest," he told Reuters.
A spokeswoman with the Singapore sovereign fund declined to
GVK acquired the Australian assets to secure long-term coal
supplies for the group's power projects in India and to meet
demand in other regional markets.
Shares in GVK Power rose as much as 4.8 percent on Tuesday,
beating a 0.3 percent gain in the broader Mumbai market, after
the Reuters report on the likely stake sale in the unit.
Still, the group's market value of $384 million is only a
fraction of what it was three years ago.
GVK Coal, whose Australian mines may produce 84 million
tonnes of coal a year at full capacity, may have a bigger market
value than its parent, one of the sources said, without
Indian infrastructure builders have been struggling
because the government has been dragging its feet on project
Private equity investments in Indian infrastructure slumped
60 percent to $183 million in 10 transactions during the quarter
ended March from $459 million in 16 transactions a year earlier,
according to industry tracker VCCircle.com.
Poor infrastructure is also a bottleneck to India's economic
growth, which slowed to 5.3 percent in the March quarter, the
weakest annual pace in nine years.
(Additional reporting by Saeed Azhar in SINGAPORE; Editing by