TT Epaper
The Telegraph
TT Photogallery
 
CIMA Gallary

Cash prop for L&T division

Mumbai, June 23: Larsen & Toubro (L&T) today said the Canada Pension Plan Investment Board had agreed to pick up a minority stake in its infrastructure arm L&T Infrastructure Development Projects Ltd for Rs 2,000 crore.

L&T has entered into a definitive investment agreement with a subsidiary of Canada Pension — CPP Investment Board Singaporean Holdings 1 — which will initially invest Rs 1,000 crore in L&T Infra.

Canada Pension Singapore will invest in L&T Infra’s preference shares, which will be compulsorily convertible into equity shares by 2018 at a valuation to be determined through a mutually agreed process. After the conversion, Canada Pension Singapore will hold a minority stake in the equity capital of L&T Infra.

This will be the first direct private investment by a Canadian pension fund in an Indian infrastructure development company.

“Canada Pension will provide growth capital to L&T Infra to expand its infrastructure development business,” L&T chief financial officer R. Shankar Raman said.

The completion of the transaction and receipt of funds are subject to the fulfilment of customary closing conditions and approvals from government authorities and regulators.

L&T Infra largely follows the public-private-partnership model of development, where infrastructure projects are developed in alliance with the central and state governments, private sector partners, financing agencies and communities.

The company is present in the development of roads and bridges, ports, metro rail, power transmission lines, wind energy and emerging sectors that include water and the railways. It also handles infrastructure assets with an estimated project cost of $7.5 billion comprising 23 projects across sectors.

The L&T scrip today rose Rs 6.80, or 0.41 per cent, to end at Rs 1653.65 on the BSE.

 
 
" "