MSK Projects raises 336 mln rupees

October 22, 2007

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MUMBAI (Reuters) – Construction firm MSK Projects India Ltd said on Monday it had raised 336 million rupees through a preferential issue to a private equity firm, which would help it bid for bigger toll projects.

MSK said it had issued 4 million shares to Subhkam Ventures at 84 rupees each, raising the latter’s stake in the company to 24.26 percent. Subhkam will now make an open offer for another 20 percent at the same price.

“We need money for our development. We have an existing relationship with Subhkam, so we agreed to this,” MSK’s Managing Director Ashok Khurana told Reuters. “We will be using this money for our BOT (build-operate-transfer) projects.”

The Baroda-based construction firm has forayed into toll road and water distribution projects and is also developing a couple of bus terminals. It has completed seven BOT projects and is currently doing two toll road projects.

After the fund infusion, the company will be able to bid for larger projects, Khurana said. It is also working on raising 3.5-4 billion rupees as debt for this purpose. “After this deal, the funding process will be completed,” he said.

Subhkam said it had not decided whether to take up a board representation, but retained an option for one board seat.

MSK shares, which hit a day’s high of 101.40 rupees on the news, ended at 100 rupees, up 3.5 percent in the Mumbai market.