| Waiting game
Mumbai, Jan. 29: CDC Capital Partners, the venture capital fund, which is in the running to pick up a stake in the demerged cement business of Larsen and Toubro (L&T) has renegotiated the terms and made its bid softer.
This was disclosed by L&T managing director A.M. Naik after a marathon board meeting here today.
“The CDC terms have been renegotiated and made softer,” he told the waiting mediapersons.
Naik said the Aditya Birla group’s counter-proposal to pick up a stake in the demerged cement entity of L&T was tabled at the board meeting but not discussed.
The board meeting which lasted almost five hours saw the contentious proposal of CDC being discussed threadbare that entailed the venture capital fund investing Rs 291 crore in the demerged cement entity of L&T.
The board meeting saw a full quorum with representatives of the financial institutions and AV Birla group supremo Kumar Mangalam Birla, now a board member by virtue of Grasim’s holding in L&T, being present.
Birla declined to comment on today’s board meeting.
“The board took note of the proposal of the Birlas and further meetings will be held within two to three weeks to discuss the demerger,” Naik said.
Late last year, CDC sprang a surprise by offering to pick up a 6.8 per cent stake in the cement entity of L&T for which it was willing to pump in Rs 291 crore. While the proposal made waves for its controversial conditions, it was felt that these stipulations could also be toned down to win over the support from financial institutions who hold close to 40 per cent in the company.
Among the controversial conditions, CDC had demanded veto rights over a number of crucial decisions. The venture capital had also said that L&T would not be able to take any decision in the affairs of the cement entity without its consent. Further, it wanted a nominee director of CDC to have a say in the day-to-day affairs of the cement division.
Meanwhile, L&T sales for the third quarter ended December 31, 2002, was up 30 per cent at Rs 2,446 crore from Rs 1,878.07 crore in the corresponding period of last year.