Mumbai, Jan. 9: The crucial January 10 board meeting of Larsen & Toubro (L&T) has been deferred again. The meeting would have discussed the demerger of the company’s cement division.
The postponement comes at a time when the L&T management is yet to get an extension for the Commonwealth Development Corporation (CDC)’s proposal that expired on December 31 even as financial institutions are warming up to the counter-proposal from the A V Birla group on a vertical split.
When contacted, an L&T official denied that a board meet was scheduled for Friday. “There was no board meet scheduled for January 10. The company has not made any communication to the stock exchanges about such a meet. Therefore, the issue of postponement does not arise,” he added.
The official said that the December 31 deadline was not rigid. He, however, refused to comment on whether the company is expecting CDC to come up with a fresh proposal with some changes in the earlier tough conditions.
CDC had demanded veto rights on a number of crucial decisions. The firm had said that L&T could not take any decision in the affairs of the cement entity without its consent. Further, its consent is also mandatory for constitution of the board, appointment of directors including nominees.
Meanwhile, the A V Birla group has mooted a vertical split whereby the existing shareholders of L&T would get stakes in the demerged entity proportionate to their holding. The group is also ready to pick up additional stake in the entity at a price offered by CDC.
CDC intends to pump in Rs 291 crore to buy a 6.8 per cent stake in the demerged entity.