BHARAT HEAVY ELECTRICALS LTD. (A Government of India Undertaking) Corporate Financial Services BHEL House, Siri Fort, New Delhi ‐ 110049 PHONE: 66337237 Fax: 66337262 Ref: AA/FIN/CFS/NBFC/EOI Date: 06/09/2010 Sub: Expression of Interest for providing services for feasibility Study of NBFC and assisting in its formation Dear Sir/Madam, BHEL is the largest engineering and manufacturing enterprise in India in the energy related/ infrastructure sector, today. BHEL was established more than 50 years ago and manufactures over 180 products under 30 major product group and caters to core sectors of the Indian economy vis., Power Generation, Transmission, Industry, Transportation, Renewable Energy, Defense, etc. The wise network of BHEL’s 15 manufacturing divisions, 4 Power Sector Regional Centres, over 100 Project sites all over India and abroad, 8 Service Centres, 18 regional offices, 4 Overseas Offices and 1 subsidiary enables the company to promptly server its customers and provide them with suitable products, systems and services efficiently at competitive prices. BHEL’s vision is to become a world‐class engineering enterprise, committed to enhancing stakeholder value. The company is striving to give shape to its aspirations and fulfill the expectations of the country to become a global player. BHEL is a “Navratna PSU” and a Limited Company registered under the Companies Act, 1956 and its stock is listed with BSE and NSE. Presently, GOI holds 67.72%, FIIs hold 15.21% and balance is held by Mutual Funds, FIs and Public. The present Market capitalization of the company is over Rs.1150 billion and Turnover is likely to cross Rs.38000 crores in 2010‐11. There is need for large power capacity addition programme in the country comprising both sub‐critical and supercritical based thermal projects, gas based projects, hydro projects and nuclear projects. Hence there is enormous opportunity for Bharat Heavy Electricals Limited (BHEL) which is a dominant manufacturer in the domestic arena. BHEL has booked orders for supply and installation of generating equipment over Rs. 59,000 crores during 2009‐10. The company’s total order book amounts to around Rs. 1,44,000 crores as at end of the last Financial year. Given a strong balance sheet and reserves, BHEL is positioned ideally to expand its role from being a mere equipment supplier to that of a financial solution provider. BHEL has recently undertaken manufacturing capacity expansion to 15,000 MW p.a. Further manufacturing capacity expansion to 20,000 MW p.a. is expected to be realized by March 2012. As such, considering the project financing requirements of the customers as well as to meet the funding requirement of proposed Joint Ventures of the Company, BHEL is contemplating to explore the possibility for formation of separate finance company (NBFC) as a Joint Venture with a strategic partner. Subsequently, the proposed NBFC can target the opportunities in overseas markets also particularly in the countries where BHEL has a sizeable presence. With increasing focus on making BHEL a global giant, the NBFC can play a major role in facilitating orders from overseas customers requiring equipment along with financing as well as the necessary financial advisory. In view of the above, we are in the process of formation of list of experienced financial advisory firms offering the said services and satisfying the Pre‐Qualification Requirements (PQR) specified in the enclosures given below. The interested firms satisfying the PQR and accepting the terms & conditions are invited to submit their Expression of Interest (EOI). A fresh tender would be floated to the short listed firms. Based upon the tender, the selected firm(s) shall subsequently enter into a separate contract with BHEL for offering the said services. Please ensure that the reply complete in all respect in requisite format with necessary enclosures is delivered on or before the due date & time .i.e. 16.00 HRS on 21st Sep 2010. All the envelopes should be indicating “EOI for feasibility report NBFC‐ BHEL” shall be addressed to: Sr DGM (Finance) Bharat Heavy Electricals Limited BHEL House, Siri Fort, New Delhi‐110049 Thanking you, Yours faithfully, For and on behalf of BHEL Sr DGM (Finance) Enclosures: Annexure‐ I : Pre‐Qualification Requirements (PQR) Annexure‐ II : Brief Scope of Work Annexure‐ III : Terms and Conditions Annexure‐ IV : Submission of EOI Procedure Annexure‐I Pre‐Qualification Requirements (PQRs) Sl No. Parameter/ Criteria Minimum Requirement Documents Required 1. Indian/ International ‐ Incorporated for more Copy of Certificate of Banking / Financial than 10 years. Incorporation or Institution/ Financial Registration Advisory Firms 2. Number of years in the Five years Copy of relevant field of Advisory Services document in support 3. No. of Organizations One Details of assignment served in Pvt. Sector / Preferable in case of undertaken. PSU/ Government for the assignment undertaken Copy of LOI or Job order related assignment for a PSU from the firm. 4. Experience in terms of One Name of Companies for number of companies for whom the said whom involved in assignment was formation of NBFC undertaken 5. Requisite Infrastructure Presence in one of the Address of Office and leading metros, contact no. of Officials preferably in NCR. 6. Experienced & Qualified Separate dedicated List of key experienced Professionals group / division for professional employees providing such type of with experience of more services than five years and their brief profile. 7. Major advisory services Give details of nature of Copy of LOI or Job order rendered to Corporate services provided, name from the Corporate having turnover of Corporates exceeding Rs. 1000 crores 8. Turnover/ Revenue of the Copy of Financial Results firm for2009‐10 Annexure II Brief Scope of Work Feasibility Study Report for Floating NBFC • Existing and expected Power Sector Scenario in India and abroad • Commercial and Financial Viability of the proposed NBFC in Power Sector • Likely IRR of Proposed NBFC • Financial projection for the proposed NBFC for next 10 years ‐ P&L, Balance Sheet, Cash Flow and other relevant ratios • Source of capital for the Proposed NBFC to minimize capital cost • Various Regulations issued by different authorities in India relating to formation of NBFC • Risks associated with floating NBFC • SWOT analysis of the proposal • Firms’ own advice regarding the formation of NBFC in power sector. • Presentation of Report to Management and to the Board, if required. • Any other matter considered relevant by the firm to provide management input in taking decision regarding the said matter. Assistance in Formation of NBFC • On acceptance of feasibility study report by BHEL management, the selected firm would be assisting in the incorporation of proposed NBFC. • Compliance with all applicable Laws and Regulations of the Country to enable the NBFC to start the operations. • Preparation and submission of the requisite documents to the relevant authorities required for incorporation of the NBFC. Annexure III TERMS & CONDITIONS 1.0 SUBMISSION OF EOI Your profile/proposal should be complete in all respects Profile/Proposals should be either typed or written legibly in English. Alterations/overwriting, if any, in the profile/proposal should be attested by the person signing the profile/proposal. Profile/Proposals with alterations etc. not authenticated as above may be rejected by BHEL. 2.0 ELIGIBILITY CONDITION Only those firms who meet the PRE QUALIFICATION REQUIREMENT (PQR) as specified in Annexure I of the EOI document shall be eligible for appointment. Proposals not meeting the PQR shall be rejected. 3.0 COST OF DOCUMENT NIL 4.0 SELECTION PROCEDURE For selection of the final firms to be appointed, the following procedure shall be adopted: All the proposals received by BHEL would be scrutinized w.r.t the Pre‐Qualification Requirement (PQR). Firms meeting the PQR shall only be considered. These firms shall be called as ‘Eligible’ firms. The firms may please note that mere meeting of the PQR does not entitle any firm the right for appointment. The ‘Eligible’ firms would then be issued a detailed tender document containing detailed scope of work, terms and conditions, evaluation criteria, contract etc., for final selection of the firms to be appointed. 5.0 ARBITRATION Any dispute or difference, whatsoever arising between the firms out of or relating to the EOI shall be referred to the sole arbitration of the Executive Director (Financial Services) Corporate Office, BHEL whose decision shall be final, conclusive and binding. The arbitrator shall give reason (s) for the award. Subject to the above, the provisions of Arbitration Act, 1996 and the Rules made there under shall be deemed to apply to the arbitration proceedings under this clause. 6.0 EFFECT AND JURISDICTION The law applicable to this EOI shall be the laws in force in India. The courts in Delhi, India, shall have exclusive jurisdiction in all matters arising under and on account of this EOI. 7.0 CONFIDENTIALITY All the material sent to the firms shall be treated as confidential and should not be disclosed in any matter to any unauthorized person under any circumstances. 8.0 INCOMPLETE EOI Incomplete EOIs, which do not contain all the information called for, are liable to be rejected. 9.0 PREBID MEETING All the short listed firms will be called for a pre‐bid meeting before calling for two part limited tender wherein the requirements of BHEL will be presented so that there is no ambiguity. The time and venue will be intimated subsequently. 10.0 CANCELLING THE EOI BHEL reserves the right to cancel/scrap the EOI without assigning any reason whatsoever. 11.0 AUTHORISED OFFICER Executive Director (Financial Services) or any other officer nominated by him shall be the authorized officer with regard to the EOI. The decision of the authorized officer shall be final and binding on the FIRM. 12.0 CONTACT PERSON Sr. DGM (Fin), Corporate Office, Siri Fort, New Delhi (Phone – 011‐66337237) Annexure IV Submission of EOI Procedure The EOI may be submitted in the following manner: a) Pre‐Qualification Check‐list with supporting documents – Annexure I b) Acceptance of terms and conditions as per Annexure III, duly stamped and signed. c) The envelope should clearly super scribe the following: a. Due Date and Time of submission of EOI b. Name and address of the firm c. BHEL address as mentioned in the covering letter.
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