A Financial analysis of GVK’s proposed Alpha Coal Project in Australia’s Galilee Basin.
The IEEFA report shows that GVK:
- has never successfully built or operated a coalmine or any business outside of India.
- is overcommitted, with16 greenfield infrastructure projects worth $20 billion across six asset classes.
- is highly overleveraged, carrying debt of US$2.8 billion with a market capitalisation of only $243 million.
- faces a plummeting stock price, which has underperformed the Indian share price index by 80% since 2010.
- has an excessively low EBIT (earnings before interest and tax) of 0.44x.
- confronts potentially insurmountable regulatory, environmental, operational, logistical and financial hurdles that will likely delay the project and escalate costs to the extent that the project is unviable even for a company with a healthy balance sheet.
Stranded- Alpha Coal Project in Australia’s Galilee Basin