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Our Bureau

Proposed issue likely by March; awaits Cabinet approval

Kolkata , Nov. 23

Bharat Earth Movers Ltd (BEML), a mini Navratna-status company, has plans to enter the capital market with a public issue by March 2007 targeting about Rs 400 crore (including the premium). The issue size will be 49,00,000 equity shares with a face value of Rs 10 per share. Issue price of the shares would be fixed based on the current market price of the company's shares in the stock exchanges.

Announcing this, the company's Chairman and Managing Director, Mr V.R.S. Natarajan, told newspersons here on Thursday at the venue of the 8th India Mining Summit (IMME-2006) that all formalities for the proposed public issue were almost complete. A formal proposal, in the regard, would be placed before the Cabinet for its approval.

Mr Natarajan said that the Union Government, which at present holds 61.2 per cent of the company's total paid-up capital of Rs 38 crore, would not subscribe any shares from the issue. The resultant impact would thus be that the Government's holding in BEML in percentage terms, would come down to 56 per cent leaving the balance shares to FIIs, FIs, commercial banks and public.

Mr Natarajan said the money to be raised would be utilised for funding the company's expansion and diversification plans.

Dumper plant

Meanwhile, the company has entered into a technical tie-up with Terex of the US for manufacturing high-end dumper with a capacity 150 tonnes to 360 tonnes. The additional capacity will be installed at the company's Mysore plant. This apart, the assembly line of the existing dumper making plant was being expanded to suit assembly of high-end dumper. The expansion programme would cost about Rs 15 crore.

Mr Natarajan said that the company recently acquired two workshops from Bharat Gold Mines Ltd at Kolar. These two workshops would now be converted for the purpose of manufacturing rail wagon, rail bogie and so on. About 100 crores would be invested for the conversion job.

Capacity expansion

He said that BEML jointly with Coal India Ltd (CIL) had approached Apollo Tyres and J.K. Tyres for expansion of their capacity to produce tyres for high-end dumpers. This arrangement has been made to improve the availability of high-end tyres.

At present, both BEML and CIL were finding it difficult to meet its tyre requirement from both domestic and international markets. BEML and CIL would jointly bear the cost of expansion of these two tyre companies. Whatever additional capacity would be created by the tyre companies would equally be shared by BEML and CIL.

Brazil venture

Mr Natarajan said that BEML had recently acquired 60 per cent equity stake in CCC of Brazil. The Brazilian company has a production unit adjacent to Rio de Janeiro. Mining equipment and machinery would be manufactured in this overseas joint venture company, to cater to the South American market. An investment of about Rs 100 crore would be made to create production facilities there.

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