ENGINEERS INDIA EYES STAKES IN REFINERIES

NEW DELHI, Feb 07, 2011 (AsiaPulse via COMTEX) --

State-run Engineers India Ltd (EIL, BSE:532178) may acquire equity stakes in the refinery and petrochemical projects where it is likely to provide engineering and construction consultancy, its chairman and managing director A.K Purwaha said Friday.

"We will be looking at acquiring equity in projects for which we will be providing consultancy," Purwaha told reporters here.

EIL, an engineering consultancy company and engineering, procurement, construction (EPC) contractor, has provided services to almost all of the refineries, petrochemical plants, oil and gas processing projects, pipeline, offshore platforms.

It is currently executing the 9-million tonnes Bhatinda refinery project for the joint venture of Hindustan Petroleum Corp (BSE:500104) and Mittal Energy, and 6 million tonnes Bina refinery for a unit of Bharat PetroleumCorp (BPCL, BSE:500547).

"EIL is looking at diversification into water and waste management, citygas distribution, thermal and nuclear power, gas-based fertiliser projects, coal-to-liquid projects and steel plants," Purwaha said.

The company would like to pick up stake in any project for distribution of CNG to automobiles and piped cooking gas to households (called city gas distribution) where it is providing project management consultancy (PMC), he said.

"We have signed a MoU with Gujarat State Petroleum Corp (GPSC)...we are likely to be bidding jointly in some of the cities," he said.

EIL has also signed a MoU with Nuclear Power Corp of India (NPCIL) for design, engineering and project management consultancy for execution of nuclear projects.

It is also working with Wipro Technologies to develop energy efficient and management products.

The company is targeting a US$1-billion order book this fiscal year. EIL bagged orders worth Rs 3,800 crore (over US$800 million) in the in the first nine months of the fiscal year year year, EIL director (finance) Ram Singh said.

As on December 31, the state-run company had a total order book of Rs 8,100 crore, three times its annual turnover.

EIL saw its net profit rise 10.25 per cent to Rs 122.45 crore for the third quarter ended December 31, 2010.

Total income of the public sector enterprise increased to Rs 709.80 crore for the quarter under review from Rs 536.27 crore for the same period previous fiscal.

For the nine-month period ended December 31, 2010, net profit rose to Rs 358.95 crore from Rs 310.85 crore in the same period previous year.

Net income rose to Rs 1,676.74 crore in the nine-month period under review from Rs 1,353.46 crore during the same period last fiscal year.

Source: ENGINEERS INDIA EYES STAKES IN REFINERIES | TradingMarkets.com

Government approves PFC follow on public offer

The government on Wednesday approved follow-on public (FPO) offer of the state-run lending agency Power Finance Corporation worth about Rs 5,732 crore.

The exact amount to be raised through the offer can be ascertained only after the Empowered Group of Ministers (EGOM) decides the offer price.

The shares of the company were trading at Rs 249.7 a price, down 2.44 per cent from previous close in the afternoon trade on Bombay Stock Exchange (BSE).

"The Cabinet Committee on Economic Affairs (CCEA) today approved the follow on public offer of the PFC," an official statement said here.

The company will also infuse 15 per cent fresh equity by issuing 17,21,65,005 shares of Rs 10, the statement added.

"The fresh equity would be 15 per cent of pre-issue existing paid up capital," it said.

Meanwhile, sources said the FPO is likely to hit the markets in the first quarter of next financial year.

The offer would comprise 5 per cent disinvestment of the government's share in PFC through putting 5,73,88,335 crore shares of Rs 10 on sale.

The government currently holds 89.78 per cent stake in the public sector company. The market capitalisation of PFC currently stands at Rs 28,854 crore.

The company had earlier divested 10 per cent stake through an initial public offering (IPO) in 2007.

After the proposed FPO, government's stake may go down to about 85 per cent.

The statement said that the reservation of equity shares for PFC employees are subject to the limit prescribed for retail investors by SEBI, which will not exceed 0.12 per cent of the issue size.

A discount of 5 per cent of offer price will be given to retail individual investors and eligible employees.

The public offer would help PFC to meet the eligibility requirement of maintaining a CRAR (Capital To Risk Assets Ratio) of 15 per cent for industrial finance company status.

The FPO will also enhance equity base of the company to enable it to meet the growing future investment needs of the power sector.

PFC is a non-banking financial institution that provides loans for various power projects in generation, transmission and distribution sector as well as for renovation & modernisation (R&M) of existing power projects.

The government has set a target of raising Rs 40,000 crore from disinvestment the current financial year, against Rs 25,000 crore in the previous close.

Source: Government approves PFC follow on public offer - Business Today - Business News