AMR Constructions in talks with US fund house

Hyderabad-based construction and mining company AMR Constructions is in talks with a US-based fund house for a possible private equity placement.

AMR Constructions is in the advanced stage of signing final term sheet with the US investor by diluting its 25 per cent stake for an undisclosed sum.

A Mahesh Reddy, chairman and managing director, AMR Constructions, confirmed the development but refused to divulge the name of the US fund house and the size of the deal. Mumbai-based consultant firm Atherston is advising the deal.

"AMR Constructions is set to register a turnover of Rs 300 crore in this financial year as several orders are being executed during this year. At present, the turnover of the company is over Rs 80 crore," said Reddy.

AMR is also planning come out with an initial public offer (IPO) to raise Rs 100 crore soon with an issue of fresh shares.

It plans to use the proceeds of the IPO to finance land acquisitions for construction and development of existing and proposed residential projects, purchase some high-end machineries and repay some high cost loans.

Currently, the company has an order book of around Rs 6,000 crore, which is 20 times its FY07 (estimate) turnover. These orders are likely to be completed in the next 12-24 months, thereby improving its earning visibility.

AMR is a turnkey player in construction projects and is engaged in civil engineering contracts in earth, leveling, mining, grading, road laying, civil excavations, canal works, desalting of rivers, laying of river beds, housing and infrastructure.

Meanwhile, AMR and a Malayasian investor Bob Sundaram have floated a 70:30 joint venture "" PT AMR Mineral Resources "" for coal mining in Indonesia. The joint venture has acquired over 1,700 acres of coal field in that country on the basis of royalty fee.

"This marks our international foray. Acquiring coal mines in Indonesia makes sense as that country offers quality coal and is logistically viable as it can be easily brought via south Indian ports. Now we are also scouting for mines in the West Asia region," said AMR Constructions chief financial officer V Surya Sastry.

The company has executed a number of civil works in Nepal on behalf of its mega clients.

Its clientele includes government, quasi government and various Indian corporate houses such as L&T, Gannon Drunkenly & Company, Bridge & Roof (India) and Grasim Cements.