gayatri projects limited - Edelweiss

OBJECTS OF THE OFFERThe objects of the offer are to achieve the benefits of listing on the Stock Exchanges and to raise capital. We believe thatlisting will provide liquidity to our existing shareholders. Further the listing will also provide a public market for our equityshares.The net proceeds of the Fresh Issue after deducting all Offer related expenses are estimated to approximately Rs. 2,717.13lakhs. The Company will not receive any proceeds of the Offer for Sale by the Selling Shareholders. The Company intendsto use the net proceeds for project related investment, repayment of debt and for meeting Offer expenses.The main object clause and the objects incidental or ancillary to the main objects clause of the Memorandum of Association,enable the Company to undertake the existing activity and the activities for which the funds are being raised by the Companyin the Fresh Issue.The proceeds of the Issue would be utilized to finance the fund requirements as underParticularsAmount (Rs. In Lakh)Investment in Special Purpose Vehicle (SPV) company for execution BOT/BOOT Project 2000.00Repayment of Debt 717.13Issue Expenses 232.87Total 2950.00The means of finance to meet the estimated funds requirement for the above stated objects is set forth in the table below:Means of FinanceAmount (Rs. In Lakhs)Proceeds of the Issue 2,950.00The fund requirement and deployment are based on internal management estimates and have not been appraised by anybank or financial institution. In the event of any shortfall in using the net proceeds of the Offer as described in the object ofthe Offer, we will reduce the amount of repayment of debt. In the event of any surplus, the management, in accordance withthe policies established by the Board, will have flexibility in repaying more Debt.Details of use of Funds of the Fresh Issue1. Investment in SPV for execution of BOT/BOOT projectThe Government of India has framed policies and ways to canalized private investment in infrastructure developmentprojects. To make this possible the government has started floating tenders inviting Public Private Partnership(“PPP”), which is typically an arrangement between the government and private sector entities for the purpose ofproviding public infrastructure facilities and related services. Among these National Highways Authority of India isproposing participation in road projects involving widening of existing two lane to four lane highways /laying of newroads on BOT/BOOT basis. These projects aim at private sector investment in the form of capital infusion with theautonomy to operate and generate revenue. Most of the construction companies are bidding for such projects. Entryinto BOT/BOOT projects would help us augment pre-qualification in this area. Typically BOT/BOOT projects are highvalue contracts having tenure of 20-30 years. To be able to undertake such projects, the Company is required toform special purpose vehicles (“SPV”) to facilitate the execution of such projects.The Company has identified one BOT project for which the company has entered into a Shareholders agreementwith Nagarjuna Construction Company Limited (NCCL), Maytas Infra Private Limited (MIPL) and Western UP TollwayLimited. Western UP Tollway Limited (WUPTL) is a Special Purpose Vehicle (SPV) incorporated on April 20, 2005to execute the Project of Improvement, Operation and Maintenance of Rehabilitation and Strengthening of existing2- lane and widening to 4-lane divided highway of Km 52.250 to Km 131.00 of NH-59 (Meerut- MuzaffarnagarSection) in the state of Uttar Pradesh on BOT basis. The project was awarded by NHAI to the consortium “NCCL-MIPL Consortium “through the SPV viz. Western UP Tollway Limited.The Concession Agreement was signed on September 9, 2005 between NHAI and consortium members viz.Nagarjuna Construction Company Limited and Maytas Infra Private Limited wherein Nagarjuna Construction Company23