Mr G.V.K. Reddy, Chairman of the diversified GVK Group, has been in the news recently following the acquisition of Hancock's mining assets in Queensland for $1.26 billion — one of the biggest cross-border deals involving India and Australia — and also for hiking GVK's stake in the Bangalore international airport.
The pace of business has been hectic, and the group is planning a massive outlay of up to $10 billion for the expansion and business plans of the mine over the next three years. The acquisition is also challenging as it involves execution in an unfamiliar business territory. All of the company verticals — power, airports and transportation — have been making news for various reasons — business, funding, acquisitions and strategic partnerships. In an exclusive interaction with Business Line , Mr Reddy outlined the strategic direction that the group is poised to take, including how its plans to execute this ambitious project Down Under. Excerpts:
This Hancock acquisition will be a major challenge in terms of implementation in an unfamiliar territory…
I don't think so. In fact, I always like challenges, without which work is not enjoyable. I began my career as a young engineer in excavation, construction and mining in some form. This will be an extension. Unlike projects in India, which have so many hurdles in terms of clearances, land acquisition etc; this is a project which has most of the clearances in place. All we now need to do is freeze business plans, take it forward. We will make this into four verticals. Two coal mines as one, another for a coal mine. Then we will have one for rail line and another for a port project. It is a big challenge but it would be worth working for, due to the promise it holds. This offers excellent growth opportunity. GVK has over 10,000 employees. Our non-profit emergency management services arm - Emergency Management and Research Institute (18,000), and the Australian mines could engage about 5,000 people. The airports project expansions are on track. There is lot of interest from strategic investors. By selecting good strategic partners the implementation will be smoother.
What about EMRI?
We have signed a five-year deal for its management and look forward to expanding its presence. Some of the recent issues with the employees have been sorted out. In fact, some of the ex-staff were creating problems. But things are back to normal. We now have a presence across 12 states and we find (that) several other States are keen to replicate their model. They have approached us. We also have plans to offer services in hilly tracts. We are close to the UP project where about 1,000 vehicles will be deployed.
What happened to the Maytas Properties buyout?
After the Satyam scam broke out, GVK was approached by financial institutions and promoters to be a suitor. After some due diligence, we decided against Maytas Infra as it had lot of other issues. However, when we were approached for Maytas Properties by promoters, we almost made it. But, as we were closing the deal, lL&FS had come up with certain claims. Based on the complications involved, we decided against going ahead.
Are you closing in on buying out a hospitality property of Viceroy group in Chennai?
We did have some negotiations initially. However, later, we backed out and decided against it.