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GEECL plans public issue by year-end

Great Eastern Energy Corporation Ltd (GEECL), a Y.K. Modi group company, plans to come out with a public issue in India during end-2008.
GEECL is the only company so far to commercially produce coal-bed methane (CBM) from its Ranigunj block in West Bengal. The company’s GDRs are listed in the AIM (Alternative Investment Market) segment on the LSE.

The company tapped foreign shores to finance its capital expenditure in CBM exploration during end-2005. The GDR issue also earned GEECL the distinction of bringing FDI into CBM exploration.

According to Mr Y.K. Modi, Chairman and CEO, as per the RBI guidelines, during the GDR issue the company was granted a three-year period ending in 2008 to list its shares in India. “We are now planning to come out with an issue in Indian market for listing our shares here in the second half of 2008-09.” On the nature of the issue, he said it would primarily be a fresh issue leading to marginal dilution of the promoter’s stake from the existing 65 per cent. “We may not dilute more than 5 per cent of promoter’s stake,” he added.

Sources in merchant banking circle told Business Line that the company may top up its existing capital base of Rs 55 crore with a Rs 10-crore public issue.
The market float will be maintained with existing GDR holders having the option to convert to shares.

Meanwhile, GEECL (www.geecl.com) has received sanction for Rs 350-crore debt-finance from an SBI-led consortium for its intense drilling programme beginning this month. Having stabilised production at 2.6 million cubic ft a day from 23 wells in a span of six months, the company has now undertaken a programme to drill three wells a months for the next two years to reach the targeted well concentration of 100. “Our capital expenditure is pegged at Rs 15-20 crore a month for the next few years,” Mr Modi said.

Apart from drilling, expenditure is also going towards laying gas pipelines connecting industries and the CNG dispensing stations at the IOC retail outlets in and around Asansol. Gas sales on a commercial scale will start in April this year. The company has already witnessed serious enquiries from SAIL-IISCO facility and Chittaranjan Locomotive Works located in the neighbourhood.

To know about Mr Prashant Modi, the President and COO of GEECL. Visit the official website at http://www.prashantmodi.com.

Dolly Tayal, Genesis B-M
dolly.tayal@bm.com - +91 9899101140
807-B Signature Towers, South City,
Gurgaon 122 001
Tel: +91 124 408 8999,
Fax: +91 124 408 6663

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