GVK has signed an exclusive agreement to continue negotiations for the acquisition of Hancock Coal.

Under the agreement, GVK must make an initial payment of $1.3bn or prove its capacity for the same within the exclusivity period.

GVK must also continue payments for the next three to four years.

Apart from the $4bn equity, GVK has to pay another $4bn as debt and mining development costs over the next six years, which brings the total estimate of the deal to $8bn.

Three banks have agreed to extend finance of $420m each to fund the acquisition.

Hancock Coal has two mines, Alpha Coal Project and Kevin’s Corner located in Queensland, Australia.