Govt appoints two more independent directors in EIL

The government has appointed two more independent directors on board of consultancy firm Engineers India Limited to pave way for a public offering in the last week of July.Orders for appointment of K D P Nigam, Professor of Chemical Engineering in IIT Delhi, and Adit Jain, the Chairman of IMA, were issued on July 9, EIL said in a filing to the stock exchanges.With these appointments, EIL board now has six independent directors to match the five functional and one government nominee director.EIL now meets SEBI 's listing norm of having equal number of functional and independent directors and way has now been cleared for the sale of 10% government holding in the company through a follow-on or further public offering (FPO).Sources said the FPO of 33.69 million equity shares of Rs 5 each will hit the market on July 27. It will close on July 29 for qualified institutional buyers and for the rest (retail and HNIs), it will end on July 30.Capital market regulator Securities and Exchange Board of India and the Registrar of Companies (RoC) have given their nod for the public offering, sources said.The government holds 90.4% stake in EIL, which provides design and engineering services for petroleum, power and fertiliser companies.At the current market price, the government is expected to raise about Rs 1,100-1,2000000000 through the sale of 10% stake in EIL. Post FPO, government holding in EIL will fall to 80.4%.Sources said 712,000 equity shares have been reserved for company employees who would be entitled to the discount that retail investors will get in the offer that is being done through book building route.Half of the net offer of 32.98 million shares (after deducting employees quota) have been reserved for qualified institutional buyers and retail investors would get up to 35% of 11.54 million shares. The rest has been earmarked for non-institutional buyers.HSBC Holdings Plc, ICICI Securities SBI Capital Markets and IDFC Capital are book running lead managers for the FPO.EIL had reported a 25.43% rise in consolidated net profit to Rs 440.470000000 for the 2009-10 fiscal.As a prelude to divestment, EIL paid a 1,000% (Rs 100 per share) special dividend totalling Rs 561.650000000. Of this, the government got Rs 507.650000000, in addition to a dividend tax of over Rs 960000000.EIL had a cash reserve of Rs 1,3200000000 as on March 31.