At the outset, the Scheme of Arrangement between KEC, RPG Transmission (RPGT) & National Information Technologies Limited (NITEL) and MP Power Line Limited, now called Octav Investments Ltd., has become effective as of 1st of October, 2007. The Scheme of Arrangement was completed in record time of less than 6 months.

Accordingly, KEC has incorporated financial performance of RPGT and NITEL for Q3 FY08 that is, in principle, not comparable to corresponding results of the previous year.

KEC International Ltd. (KEC) has reported third quarter revenue of Rs. 708.91 crore. Net profit for the third quarter stands at Rs. 52.3 crore. Further, the company’s EBITDA margin stands at a healthy 14.46 % and EPS at Rs. 10.60.

For the sake of clarity, KEC (stand-alone) reports sales of Rs. 618 crore for the quarter versus Rs. 555 crore last year. For nine months ended 31st December 2007, KEC (stand-alone) reports sales of Rs. 1693 crore against sales of Rs. 1397 crore, an increase of 21% as compared to the corresponding period of previous year.

The merged KEC has a healthy Order book level of Rs. 5050 crore. Of this, Rs. 4220 crore are orders in hand and Rs. 830 crore are L1 positions. KEC’s overseas Order book is at Rs. 3450 crore and the South Asia order book is at Rs. 1600 crore.

“I am very happy with the current situation. This is a healthy well balanced order book situation in which, including L1 positions, our current order book level stands at over Rs. 5000 crore. This augurs well for the future,” said Ramesh Chandak, Managing Director, KEC International Ltd.

Mr. Chandak went on to add, “ With the merger of RPG Transmission Ltd. (RPGT) and NITEL into KEC completed, we are now a mega EPC company. We are set to leverage the benefits of synergy and scale that this merger enables for KEC.”

Enhanced equity capital of KEC is now Rs. 49.34 crore from a pre-merger status of Rs. 37.69 crore.

Swap Ratio: 4 KEC International Ltd. (KEC) shares of Rs. 10 each for 9 RPGT shares of Rs. 10 each; 2 KEC shares of Rs. 10 each for 15 NITEL shares of Re.1 each. The investment division of KEC, will be de-merged into a separate company, viz. Octav Investments Ltd., that will be listed and KEC shareholders will get 2 shares of Rs. 10 each of Octav Investments Ltd. for every 25 shares of KEC held by them.

The merged KEC entity will become a globally diversified infrastructure EPC major. It has the largest tower manufacturing production capacity in the world.

KEC will leverage complementary capabilities, possess expanded geographic presence and enter the new thrust area of telecom infrastructure.

The combined entity will boast the largest production capacity in the world for tower manufacturing. This merger will enable KEC -- one of the largest Transmission EPC companies in the world -- with operations in over 16 countries, to leverage manufacturing synergies, capital, human resource and technical strength to grow its business to enhance shareholder value. Telecom expertise through NITEL provides operational and marketing synergies.

Telecom will be the trump card. This will be a critical differentiating feature for KEC in the EPC space. “NITEL’s USO Fund project, establishing 384 tower infrastructure sites across Central and North-East India on a BOO basis creates a sustainable revenue stream and a strengthened asset position,” said Mr. Chandak.

Of the merged entities, RPGT is engaged in the business of EPC Contracting in transmission, rural electrification and railway electrification – a business that is similar to that of KEC. NITEL is engaged in the business of setting up and operating telecom infrastructure – it possesses proven expertise and qualifications in an industry, which, by all accounts, is on the threshold of exponential growth.