From correspondents in Delhi, India, 08:29 PM IST

Somi Conveyor Beltings Limited is a manufacturer of Rubber Conveyor Belts of various sizes used for industrial applications of material handling in various industries such as coal, lignite, iron ore, mining, cement, power, steel, fertilizer and sugar etc. The Company has also recently introduced food grade belts for tea gardens and salt industries. The Company proposes to enter the Capital markets on 24th June, 2008 with an Issue of 62,27,860 Equity shares of Rs 10 each at a fixed price of Rs 35 (including a premium of Rs 25 per equity share) aggregating to Rs 2179.75 Lakhs.

The Issue comprises a contribution by promoters of 14,99,286 Equity shares of Rs 10 each at a price of Rs 35 per equity shares aggregating to Rs 524.75 lakhs. This leaves a net issue to the public of 47,28,574 Equity shares aggregating to Rs 1655 lakhs, including an allocation of at least 10% of the net public issue to QIBs. The net issue to the public would constitute 40% of the fully diluted post issue paid up capital of the company. The Issue closes on 27th June 2008. Ashika Capital Limited is the Lead Manager to the Issue.

The Company proposes to utilize the net proceeds of the issue to part finance its Rs 3509 lakh project cost. The expansion and modernization project consists of setting up of new manufacturing unit, purchase of land and building for office use, meeting margin money requirement for enhanced working capital and meet the interest cost during the construction period. The project is proposed to be funded through promoters contribution of Rs 1004 lakhs, IPO proceeds of Rs 1655 lakhs and term loan from Punjab National Bank of Rs 850 lakhs.

The Company, earning profits since last 5 years, had commenced production with an initial capacity of 36,000 MPA and it has expanded to present operating capacity of 1,67,660 MPA. Depending upon the width of the rubber conveyor belt the capacity utilization can be stretched up to 2,00,000 MPA. Considering the potential for growth, it intends to raise production capacity to 4,00,000 MPA and also enlarge the belt width from the current 1200mm to 2000mm.

Somi is setting up new factory unit with an installed capacity of 1,72,080 MPA for manufacturing rubber conveyer belts of 2000 mm width at Village Tanawara, Jodhpur, Rajasthan. The capacity can be stretched up to 2,00,000 MPA. The Project has been appraised by Punjab National Bank, Technical Cell, New Delhi and the Bank has sanctioned loans of Rs 850 Lakhs. Out of the sanctioned limit, an amount of Rs. 804.68 Lakhs has already been disbursed by Punjab National Bank as on 31st May 2008.The Commercial Production is expected to commence by August, 2008.

Disclaimer

Somi Conveyor Beltings Limited is proposing, subject to market conditions and other considerations, a public issue of the equity shares and has filed the Prospectus with Registrar of Companies (ROC), Jaipur. The Prospectus is available on the website of SEBI at www.sebi.gov.in, the website of the Lead Manager at wwwashikadirect.com and the website of the Company at www.somiconveyor.com.

This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any equity shares, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

The Equity Shares have not been and will not be registered under the US Securities Act (“the Securities Act”) or any state securities laws in the United States and may not be issued or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Any potential investor should note that investment in equity shares involves a high degree of risk. For details, see the section titled “Risk Factors” of the Prospectus, which has been filed with the Registrar of Companies.

Source: Press Release Distribution via India PRwire