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Wednesday, November 22, 2006

BEML equity offer likely in March 2007

Bharat Earth Movers, BEML, the public sector engineering outfit is hoping to come out with a public offer in March 2007, reports Business Standard.

The company would raise Rs 400 crore through the issue to fund its proposed capital expenditure.

A part of this proceeds would be invested into a contract mining joint venture of BEML with an Indonesian outfit.

The chairman and managing director of BEML, V RS Natarajan, said that the company is expecting to get the cabinet nod in this regard within a month. "Cabinet would take up the issue in November. We are expecting go ahead signal in a month," he said.

He was in Kolkata on Wednesday for the India Mining Summit, to be organised by CII.

According to him, the number of shares to be issued would be 49 lakh following the good performance of the BEML scrip at the bourses.

BEML is now being traded at Rs 1,000-1,100. It has touched a 52-week high of Rs 1785 in March this year.

He informed that the entire proceeds of the public offering would be invested in capital expenditure projects. A major portion of the public issue proceeds would be invested in coach manufacturing facilities for underground railway systems at its unit near Bangalore.

Besides, it would invest around Rs 50 crore in a joint venture for contract mining.

"The contract mining outfit will be a threeway joint venture between BEML, an Indian company and an Indonesian outfit. We are likely to have 50% stake and our partners will have 25% each," he added.

According to Natarajan, BEML would invest close to Rs 250 crore in metro coach manufacturing facility.

The Union government held close to 61% in BEML at present. After the public issue, the central government's shareholding was likely to come down to 55%.

Commenting on its joint venture, JV in Brazil, the BEML CMD said that the JV would start production from the second quarter of 2007. BEML had set up the JV in Brazil with CCC (Compagnie Comercio E Construcoes) for manufacture and supply of rail wagons and bogies, along with mining and construction equipment, and spares.

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