| JV will execute engg, construction jobs in UAE.
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| Engineers India (EIL) will form a joint venture with Tecnimont SPA of Italy for the execution of engineering, procurement and construction (EPC) jobs in the UAE.
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| Tecnimont SPA - a leading international EPC contractor with a strong presence in the oil and gas, petrochemical and chemical sector - will hold 70 per cent stake in the proposed JV, while the Indian engineering and consultancy company will hold 30 per cent, an official source said.
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| The joint venture will be registered in Madeira, Portugal, through the acquisition of a shell company, Lihatonbur-Consultores e Servicos Lda, in Madeira. Madeira has been identified as the location for registering the JV, from the tax, legal and operational point of view.
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| The EIL-Tecnimont joint venture will target mega projects exceeding $500 million. While the scope of state-run EIL would be engineering, project management and part-procurement, the Italian firm would be responsible for construction, management and part-procurement.
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| Tecnimont would offload 10 per cent of its equity to a local partner on a case-to-case basis.
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| As a part of its business growth strategy, EIL has been focusing on EPC projects in the international market. The formation of a JV with a construction company of global standing would help EIL pursue EPC projects in the oil and gas sector, especially in the UAE region.
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| The finance ministry, in its comments in the cabinet note floated for formation of the JV, has not favoured acquiring the shell company Lihatonbur Consultores e Servicos Lda as it had a negative networth. EIL and Tecnimont, it felt, should form a new JV instead, the source added. |
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