Press release
Press release

KEC INTERNATIONAL & RPG CABLES BOARDS - 10/30/2009

  • RPG Cables(RPGCL) shareholders to receive 1 (one) share of KEC for every twenty(20) shares of RPGCL
  • Merger to support KEC’s current portfolio of project management businesses substantially
  • Merger to create synergies and vertical integration for KEC
  • Opens up market for cables across KEC’s international locations

Mumbai, October 30, 2009: The Boards of Directors of KEC International Limited (KEC) and RPG Cables Limited (RPGCL) today unanimously approved RPGCL’s merger with KEC, subject to necessary approvals.

The exchange ratio recommended by both boards is 1 (one) share of KEC for every 20 (twenty) shares of RPGCL. KEC will issue 2073068 new shares, thereby increasing its equity capital to Rs. 51.42 crore.

Commenting on the merger, Harsh Goenka, Chairman, KEC International Ltd, said: “This merger is a natural extension of KEC’s role in the energy space and a key element in the energy distribution portfolio that KEC is building into its strategy. Besides, there are obvious and distinct synergies which it will provide. The merger will also enhance value for the shareholders of both companies.”

Merger benefits and synergies:

The merger will create clear operational and financial synergies for the merged entity. KEC consumes cable products in its current portfolio of project management businesses like Distribution, Telecom and Railways. The merger will provide in-house capacity for these cable products which will boost these businesses, thereby furthering KEC on the path to becoming an integrated infrastructure project management player.

KEC’s global presence, client network, financial strength and project execution capacity can be leveraged to expand the cables business both in volumes and in geographical reach. The merger will also enable KEC to achieve cost and operational synergies through rationalization of administrative functions.

Ramesh Chandak, MD & CEO, KEC International Limited said, “Just as our own tower manufacturing capacities have given a thrust to our transmission business, the merger provides us with cable capacities which will support our distribution, telecom and railways business substantially.”

Merger details:

Under the terms of the proposed merger, RPGCL shareholders will receive 1 (one) share of KEC for every 20 (twenty) RPGCL shares held by them.

The appointed date of merger of RPGCL with KEC is March 1, 2010.

Based on the recommended merger ratio, KEC will issue 2073068 new equity shares to the existing shareholders of RPGCL. This will result in a 4.2% increase in equity base from Rs. 49.34 crore to Rs. 51.42 crore. Consequently, the promoter holding in KEC will reduce from 41.94 % to 41.59%

The proposed merger is subject to all necessary approvals. All other procedural aspects of the proposed merger, and the timetable for implementation, will be communicated subsequently.

About KEC International Ltd.

KEC International Ltd. is a global leader in the power transmission project management business. With global operations spanning over 20 countries, the company is present in India, UAE, Libya, Ghana, Algeria, Afghanistan, Nigeria, Kazakhstan, Mali, Oman, South Africa, Kenya, Ethiopia and Egypt among several other countries. KEC is the flagship company in the transmission sector of the RPG Group. The company’s annual turnover for 2008-09 was Rs. 3428 crore.

About RPG Cables Limited

RPG Cables Ltd. is a leading manufacturer of power & control, telecommunications and instrumentation cables in India having facilities at Thane, Silvassa and Mysore. It offers Turnkey cabling solutions involving cable supply, selection, jointing, testing and commissioning with export footprints in various countries viz, Sri lanka, Nepal, Bhutan, Nigeria, Australia, Bangladesh, Afghanistan, Uganda, Malaysia and Central Asia. The company’s annual turnover for 2008-09 was Rs. 355 crore.

About RPG Enterprises

RPG Enterprises is one of the India’s leading business groups with a turnover of Rs. 15,000 crore. RPG Enterprises has a presence in Sectors like Power, Tyres, Retail, IT, Transmission, Carbon Black, Specialty & Entertainment.

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