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Wednesday, April 18, 2007

BEML files DRHP with SEBI for follow-on public offer

BEML, multi-locational and multi-product manufacturer of mining and construction equipments, railway & metro products and defence products, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to enter the capital markets with its follow-on public offer of equity shares.

The company proposes to offer 49,00,000 equity shares of Rs 10 each for cash at a premium to be decided through a 100% book building process. The issue includes a reservation for eligible employees of 4,90,000 equity shares and a net issue to the public of 44,10,000 equity shares.

The issue would constitute 11.77% of the fully diluted post-issue paid-up equity capital of the company. After the issue, the government holding is expected to be approximately 54%, and the company will continue as a "Government Company".

The book running lead manager to the issue is ICICI Securities.

The issue proceeds will fund the expansion of the Metro Coach manufacturing facility at Bangalore, and capital expenditure including upgradation of current facilities. The company also intends to use part of the proceeds to set up a 5MW Wind Mill for captive consumption and contribution towards setting up of an R&D Centre of Excellence for Metro Coaches. The company will also earmark some part of the proceeds towards a voluntary retirement scheme for employees.

Bharat Earth Movers is a Mini-Ratna (Category 1) company under the Ministry of Defence and ranked. BEML primarily deals in three product segments comprising mining and construction equipments, defence products and railway & metro products through which it caters to vital applications in diverse sectors of the economy such as mining, steel, cement, power, irrigation, construction, road building, defence, railway and Metro transit system.

Recently, it expanded its product range to cover high quality hydraulics, heavy-duty diesel engines, welding robots and heavy fabrication jobs. In the beginning of fiscal 2007, it decided to foray into two more new business areas: a) technology, providing e-engineering solutions globally; and b) trading, for marketing non-core components, spares, aggregates and commodities for domestic and international markets. It has been at the forefront of delivering robust, high-quality products to its customers resulting in low cost of ownership. To this extent, it incorporates state-of-the-art technology in all the products through market-driven R&D, and collaborates with reputed international companies for imbibing the latest technology.

The existing equity shares of the company are listed on the Bombay Stock Exchange, National Stock Exchange and the Bangalore Stock Exchange, as per press release.


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