To become eligible for acquiring controlling stake

Our Bureau

VEL will undertake all its international business through Koon and use the firm's expertise in marine, dams and reclamation works.

Mumbai Feb. 9

Infrastructure development company Valecha Engineering Ltd (VEL) has signed an agreement with Koon Holdings Ltd of Singapore, which will qualify it to acquire controlling stake in the foreign entity.

Under the agreement, Koon will acquire a stake in VEL and its subsidiary Valecha Infrastructure Ltd (VIL), apart from VEL's international assets in Dubai. In return Koon shall issue 12.4 crore ordinary new shares to VEL, taking its holding above 60 per cent in Koon. In addition, VEL shall also be granted 20,000,000 warrants.

Additional Qualification

Mr Jagdish Valecha, MD, Valecha Engineering, said: "We will get reach in the West Asia and Asia-pacific markets through this acquisition and it will give us additional qualification for marine and reclamation works."

He added that it would also be able to access the Australian and Singapore capital markets for VEL's global growth, as Koon is a listed entity in both theses exchanges. After the completion of the transaction, Koon will own VEL's international interest, about 48 per cent shares of VIL and about 5 per cent shares of VEL, while VEL will own about 60 per cent of Koon's enlarged share capital.

VEL will be maintaining Koon as an independent operating entity with its listing on the Australian and Singapore exchanges. VEL will undertake all its international business through Koon and use the foreign firm's expertise in marine, dams and reclamation works.

(This article was published in the Business Line print edition dated February 10, 2007)
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