Price band fixed at Rs 263 to Rs 272.
Mumbai, Maharashtra, India, August 7, 2008 (PRESSbooth.ORG) -- Resurgere Mines & Minerals India Limited, engaged in the business of extraction, processing and sale of mineral products and exploration and development of mining assets, proposes to enter the capital markets on 11th August 2008 with a public issue of 4,450,000 Equity shares of Rs 10 each through 100% book building process. The price band has been fixed at Rs 263 to Rs 272 per Equity share of Rs 10 each. The Issue closes on 13th August 2008. The Issue comprises of reservation of 250,000 Equity shares for eligible employees, leaving the net issue to the public of 4,200,000 Equity shares. The net issue would constitute 14.72% of the post issue paid-up capital of the Company. Motilal Oswal Investment Advisors Pvt. Ltd is the BRLM for the Issue and PL Capital Markets Pvt. Ltd and Ashika Capital Ltd are the Co-BRLMs for the Issue. The Equity shares are proposed to be listed on BSE and NSE.
The Company proposes to utilize the net proceeds of the Issue to part finance its plan for purchase of Plant and Machinery valued at Rs 1,285.64 million for setting up of its own extraction and crushing facilities at the mines and purchase of six railway rakes worth Rs 1,163.60 million to set up own logistics infrastructure facilities, besides meeting margin money requirement for working capital. The Company proposes to part finance the cost through term loans of Rs 860 million to be raised from banks, Rs 430 million through Private Equity funding from Merrill Lynch International and Rs 137.30 million through Pre-IPO allotment. Merrill Lynch International holds 3,000,000 Equity shares, India Business Excellence Fund-I holds 910,000 Equity shares, IL&FS Trust Co. Ltd ( Trustees of Business Excellence Trust-India Business Excellence Fund ) hold 402,500 Equity shares, Mr Motilal Oswal hold 250,000 Equity shares and Mr. Raamdeo Agarwal holds 200,000 Equity Shares in the Company.
Presently, the extraction and processing activities of Resurgere Mines & Minerals India Ltd at existing operational mining locations are outsourced to various service providers. In order to reduce its operational costs and to increase its volumes the Company intends to deploy own machinery, labour and other material resources at its existing mining locations as well as at newer mining locations that it purport to undertake. Further, to facilitate easy movement of its products, the Company proposes to acquire six railway rakes for providing the same to railway authorities under the Wagon Investment Scheme. Under the Scheme, on handing over the purchased rakes to the railways, the Company would be provided with an assured supply of 4 rakes per month against each rake. Additionally, the Company will be entitled to a freight rebate of 10%. Furthermore, it will also be eligible to get additional 2 rakes per month against each rake given by it without freight rebate.
Resurgere Mines & Minerals India Ltd has a diverse product range which includes various forms of iron ore such as Lump ore, Size ore, Calibrated Lump ore (CLO) and iron ore fine etc. and bauxite. It sales all these products domestically except iron ore fines which it exports to China. Resurgere is one of the few Companies in the mining industry to have obtained ISO 9001:2000 and ISO 14001:2004 Certification from UKAS, United Kingdom. Furthermore, the Company is a recognized Star Trading House of India and is also member of various business councils i.e. CAPEXIL, FIEO, FIMI etc. The Company intends to become one amongst the leading players in the mining industry with its vast product portfolio. With this vision, it purports to venture into mining of others minerals and resources which inter-alia may include copper, manganese, zinc and others.
Currently it operates in Nuagaon, Kendujhargarh district and Maharajpur, Mayurbhanj district of Orissa and it purports to commence operations at Tatiba mine in Singhbhum district of Jharkhand in the near future. The Company has entered in to long term contracts for Nuagoan, Tatiba and Maharajpur mines, with the leaseholders for raising and purchasing of iron ore. All the three mines carry high quality iron ore of about 62% - 64% Fe content. It has also made an application to the Collector of Sindhudurg district for the grant of an iron ore mining lease over an area of 108.77 hectares in village Banda, District Sindhudurg in Maharashtra.
Through wholly owned subsidiary M/s. Warana Minerals Private Limited (WMPL), Resurgere holds a 60% interest in a registered partnership firm, Shri Warana Minerals which is engaged in the business of mining bauxite ore under the 30 year mining lease with respect to a bauxite mine situated in Yelwan Jugai, Maharashtra. The mining assets of the Company, except Banda mine, have cumulative estimated reserve of 74.82 million tonnes of iron ore and 4.92 million tonnes of bauxite as certified by Central Mining Research Institute as per their certificate dated July 25, 2007 and September 3, 2007 respectively.
Resurgere Mines & Minerals' Operational Income and Profit after Tax (PAT) after restatement of financial statements for the financial year ending March 31, 2007 was Rs. 1642.43 millions and Rs. 303.67 millions respectively and for year ending March 31, 2008 it was Rs. 4030.04 millions and Rs. 665.62 millions respectively. Its Operational Income and PAT have grown at 93% and 251% year on year basis during the financial year 2006-2007 and 145% and 119% year on year basis during the financial year 2007-2008 respectively.
The iron ore industry is enjoying continued boom conditions, as demand continues to soar on the back of the developing world's rapid industrialization. The market remains tight, and supply systems are stretched, leading to unprecedented increase in prices. After rising by as much as 14% a year, global iron ore consumption is expected to continue to grow.
Disclaimer:
Resurgere Mines & Minerals India Ltd is proposing, subject to market conditions and other considerations, a public issue of the equity shares and has filed the Red Herring Prospectus (RHP) with Registrar of Companies (ROC), Mumbai. The RHP will be available on the website of SEBI at www.sebi.gov.in, the website of the Book Running Lead Manager at wwwmotilaloswal.com and websites of Co-BRLMS at www.plindia.com and www.ashikadirect.com and website of the Company at www.resurgere.in ..
This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any equity shares, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.
The Equity Shares have not been and will not be registered under the US Securities Act ("the Securities Act") or any state securities laws in the United States and may not be issued or sold within the United States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Any potential investor should note that investment in equity shares involves a high degree of risk. For details, see the section titled "Risk Factors" of the RHP, which has been filed with the ROC.
Contact:
Manju Madan,
Sr. Vice President,
Concept PR 9320045784 / 9820045784 /40558900
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