Date:27/03/2007 URL: http://www.thehindubusinessline.com/2007/03/27/stories/2007032704161000.htm

Back Darby Overseas to invest Rs 75 cr in Escorts unit

Our Bureau

New Delhi March 26 Escorts Ltd announced on Monday that private equity firm Darby Overseas Investments Ltd, part of the Franklin Templeton group, will invest Rs 75 crore in its construction equipment unit.

"We will be utilising the funds to set up a new plant at Ballabgarh in Haryana. We hope to start operations at the upcoming unit within eight-10 months," the Escorts Chief Operating Officer and Executive Director, Mr Nikhil Nanda, said. In December, Mr Nanda had said that its construction equipment firm, Escorts Construction Equipment Ltd (ECEL) planned to more than double output to about 7,000 units a year in two years.

The unit, which manufactures pick-and-carry cranes, forklift cranes, compacters and loaders, has annual revenues of Rs 350 crore.

Public issue

"We are looking at growth in all the segments we are present in. Further, there is management intent to come out with a public issue for ECEL in three-four years,'' Mr Nanda said.

The current investment is being made through Darby Asia Mezzanine Fund II. "Mezzanine finance is an attractive source of long-term capital for us as we pursue our plans for growth and an increased share of overall market," the Escorts Chairman, Mr Rajan Nanda, said.

Darby Overseas Investments has chosen to invest in ECEL to leverage on the booming construction equipment industry in the country.

``We are attracted to ECEL because of its pole position within India's rapidly-expanding construction equipment sector, ECEL fits well into our investment strategy of supplying risk capital to medium-sized companies with high quality management and good growth prospects," the Darby's Chief Executive Officer, Mr Richard H Frank, said.