KEC, RPG, NITEL boards okay share-swap ratios

KEC International, the infrastructure company of RPG Enterprises, today announced share swap ratios for the shareholders of RPG Transmission (RGPT) and National Information Technologies (NITEL) following the decision to merge RPGT and NITEL with KEC.

RGPT shareholders will get 4 shares of KEC for every 9 shares and NITEL shareholders will get 2 shares of KEC for every 15 shares.

The share swap ratio was announced today after the boards of these three companies approved the mergers. The merger scheme also proposed spinning of the investment division of KEC into a separate entity. The appointed date for the merger is fixed on October 1 and the merger formalities, including the receipt of the required approvals, are expected to be completed by end-March.

The merger would create the largest tower manufacturing company in the world with a capacity of 1,40,000 mega tonne (MT) per year, with almost double the size of its immediate competitiors such as Kalpatharu Power and the transmission business of Asea Brown Boveri (ABB), Ramesh Chandak, MD of KEC, said.

The combined entity will have a turnover of Rs 2,538 crore with an EBITDA of Rs 301 crore and a combined order book of Rs 5,000 crore, he added.

"Major tower capacities are in India, Mexico, Turkey, Saudi Arabia, Brazil and Yugoslavia. Leveraging the expertise of telecom infrastructure space through NITEL will be a major advantage for KEC as it enables integration of project and asset management, improved resource utilisation, procurement, finance and administrative cost savings. Further, this will
help KEC to participate in larger tender projects," he said.

The Rs 60 crore NITEL is involved in creating communication network infrastructure and has bagged four clusters under Universal Service Obligation (USO) fund - an obligation on the part of telecom operators to create infrastructure in rural areas, for setting up 384 cell sites in Chattisgarh, Mizoram and Meghalaya.

KEC , one of the largest companies in EPC of transmission lines, has laid over 58,000 kms of lines in over 40 countries and is executing projects in 16 countries. It had entered into the North American market this year bagging two major projects.

RPGT, a Rs 400 crore company, came under the RPG fold in 1994 and is one of the oldest company in transmission and railway electrification business in India.