KEC International, RPG Cables boards approve merger
30 Oct 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 boards have recommended an exchange ratio of one share of KEC for every 20 shares of RPGCL. KEC will issue 2,073,068 new shares, thereby increasing its equity capital to Rs51.42 crore.
"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." Harsh Goenka, chairman of KEC International, said.
The merger will create clear operational and financial synergies. KEC consumes cable products in the 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, the release said.
The merger will also enable KEC to achieve cost and operational synergies through rationalisation of administrative functions.
"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," Ramesh Chandak, MD and CEO of KEC International said.
RPG Enterprises is one of the India's leading business groups with a turnover of Rs15,000 crore. RPG Enterprises has a presence in Sectors like Power, Tyres, Retail, IT, Transmission, Carbon Black, Specialty & Entertainment.
