Financial Daily from THE HINDU group of publications
Wednesday, Jan 18, 2006
Patel Engg plans to enter real estate, hydel power Rs 500-cr funds to be raised
Kolkata , Jan. 17
THE Rs 800-crore Patel Engineering Ltd (PEL), a civil engineering company, is diversifying into a number of related areas.
The company is reportedly planning forays into areas such as real estate and hydro-power generation.
According to a reliable source, around Rs 500 crore will be raised to finance the plan, repay certain debts, and boost capital expenditure and working capital. An enabling resolution for fund-raising will be placed before the shareholders on January 30.
The proposed exercise is likely to be through a mix of equity and debt instruments in foreign currency as also in rupee.
The company has property in Mumbai, which is worth Rs 200 crore at current market prices.
The property will be developed on a commercial basis to kick-start the company's real estate venture. Plans are likely to be given shape in 2006-07.
PEL is also looking at hydro-power generation through installation of a project in the North-East.
Initial discussions have begun with some of the State Governments in the north-eastern region.
Its order-book position has grown to around Rs 4,300 crore from Rs 3,171 crore as on March 2005, with an average maturity of four years.
The company is working on acquiring an overseas engineering company with specialisation in civil construction work.
New tech: The all-cash deal is likely to be clinched within the next three months.
"The company would bring in a new technology to PEL, which is not available in the country so far," the source said.
According to industry sources, the proposed acquisition is likely to enhance PEL's technological expertise in the construction of dams in mountainous terrain.
PEL had earlier acquired two US based engineering companies - ASI RCC Inc and Westcon Microtunneling Inc - for their specific engineering expertise in roller compacted concrete (used in construction of dams) and micro-tunnelling technology.
The total investment in acquiring the two overseas companies was around $ 7.5 million.
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