L&T buys 4.2% stake in Kalindee Rail

The country’s largest engineering firm Larsen & Toubro (L&T) has picked up 4.2% stake in Delhi-based Kalindee Rail Nirman Engineers from open market. L&T Capital, a subsidiary of L&T, on Friday bought 4.5 lakh shares of Kalindee at an average cost of Rs 121.21 a piece, according to statistics with BSE.Blackstone Asia was the possible seller.

KRNL is a significant beneficiary of aggressive capex plans of Indian Railways and makes a strategic fit with L&T’s future plans. The company has proven skills in tracks, signalling and telecommunications.KRNL has a strong relationship with the Indian Railways and qualifies for required technical specification and safety norms by it. It has also entered into various tie-ups and JVs with leading international players to keep pace with technology.

Some of the other shareholders in the company include Quantum, HDFC Trustee Company, JPMorgan, Sundaram BNP Paribas, Morgan Stanley who along with others hold about 44% in the firm as per the shareholding patter as of June 2008. Promoters currently hold 24.66% stake in the company.

Lafarge buys L&T concrete unit for $349 mn

Lafarge, the world’s second-largest cement maker, has acquired Larsen and Toubro’s (L&T) Ready Mix Concrete (RMC) business for $349 million (Rs 1,480 crore). The deal will help Lafarge access L&T’s 66 plants and also make it the country’s largest RMC maker.Leading cement manufacturers Holcim, AV Birla Group and Heidelberg were also in the race to buy the business.

Lafarge has routed the acquisition through its building material firm Lafarge Aggregates & Concrete. A formal announcement is expected on Thursday. Lafarge is believed to have informed the Paris stock exchange. Lafarge India is not a listed entity.JM Financial advised Lafarge on the transaction, while Citigroup Global Markets advised L&T.

Each unit of L&T Concrete has a capacity to produce 5,000-6,000 cubic metres of concrete a month, while the total capacity is estimated to be around 3-4 million cubic metres per annum. RMC is widely used in the building and construction industry in India, where L&T has a 25% market share.

Read more in The Economic Times article.

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Lafarge leads race for L&T Concrete

Lafarge leads race for L&T Concrete

French cement major Lafarge SA, the world's second-largest cement maker, has emerged the frontrunner in the race to acquire the ready-mix concrete (RMC) business of engineering and construction major Larsen & Toubro (L&T).

The construction giant sold its cement business to the Birlas in 2003, now UltraTech Cement, but retained the RMC division. The company is the leader in the RMC segment with a market share of 25 per cent. The revenue is Rs 1,000 crore annually.

In December last year, L&T had decided to hive off its RMC business into a separate entity called L&T Concrete. The company's plans to hive off its non-core businesses.
L&T has 66 RMC plants across the country with an overall annual installed capacity of around 4 million cubic metres.Industry analysts said RMC constitutes 3 per cent of the total cement business at present, but the growth opportunities are enormous with spending on infrastructure on the rise.

Lafarge entered the Indian market in 1999, with the acquisition of Tata Steel's cement business. This acquisition was followed by the Raymond Cement facility in 2001.Swiss cement major Holcim was also in the race as both cement firms see this business as the future of the cement industry.

Read more in The Business Standard article.

L&T signs JV with US firm for pipelines

Engineering and construction firm, Larsen & Toubro Ltd, said on Friday it had signed a joint venture for pipelines with US-based Gulf Interstate Engineering Co."The joint venture company will augment L&T's offering in pipelines," L&T said in a statement to the National Stock Exchange.

L&T buys out switchgear firm Tamco

In an attempt to take on ABB and Siemens in the medium voltage switchgear market, Larsen & Toubro (L&T) acquired the switchgear business of Malaysian company Tamco for about $110 million.L&T currently has “zero per cent” market share in the medium voltage switchgear market. With this acquisition, it expects to garner a 10% share by 2009-10.

L&T has out a 40% market share in low voltage switchgears in the domestic market.
As big-ticket investments in power generation and transmission take place in the country, L&T’s acquisition is timely and provides it a quick entry into a new segment.The acquisition would help double revenues at L&T’s electrical and electronics division to $1 billion by the year to March 2010.For L&T, the low voltage switchgear business contributed $500 million to annual revenues whereas Tamco’s revenues last year were pegged at $102 million.

Read more in The DNA Money article.

L&T plans to pick up stake in Feedback

Larsen & Toubro (L&T), the country’s largest infrastructure company, is close to acquiring a stake in Feedback Ventures, a leading integrated infrastructure services firm. L&T’s investment vehicle for the acquisition will be the newly formed L&T Infrastructure Finance.

Sources in the know of the development said L&T Infrastructure’s investment in Feedback would be strategic in nature and bring both the companies closer in the future.Mission Holdings, a group of people who founded the New Delhi-based Feedback Ventures, holds 36 per cent stake. Other shareholders of the closely held company include DLF, HDFC, IDFC and the Thapar group outfit, NewQuest Corporation.

Read more in The Business Standard article.

Larsen & Toubro plans to raise $700 million

India’s Larsen & Toubro Ltd has sought shareholder approval for raising up to $700 million (Rs2,800 crore), as the country’s largest construction and engineering firm expands its operations overseas.

The company said it wants to raise the money through issues that could include global depositary receipts (GDRs), American depositary receipts (ADRs), foreign currency convertible bonds or other equity related instruments.

It has also sought approval from shareholders at the firm’s annual general meeting on Friday to authorise the board to convert previously issued GDRs to ADRs and list at Nasdaq or the New York Stock Exchange.

Binani in the fray for cement JV with Nalco

Binani Cement Ltd (BCL), flagship of the Rs 1,500-crore Binani Group, has submitted expression of interest (EoI) for a joint venture with National Aluminium Company Ltd (Nalco).

Nalco is scouting for a joint venture partner to set up a cement plant that uses fly ash generated at its captive power plant.It aims to invest Rs 1,000 crore in the facility, which would have a capacity of producing 1,000 tonnes of cement per day.

Other cement majors including Gujarat Ambuja, ACC and L&T are also considering submitting EoIs for the JV, sources said.

A top Binani Cement official confirmed submission of the EoI. However, Vinod Juneja, joint managing director, refused to comment on the move.

Read more in The DNA Money article.

L&T Infotech eyes $1-b post through M&As

L&T Infotech, the unlisted technology arm of engineering and construction major Larsen & Toubro, plans to become a $1 billion company through expansion and acquisitions, a senior executive said on Monday. “In terms of size, we are not competing with top tier companies, but we want to be in tier I when it comes to quality, reputation and service,” L&T chairman AM Naik told reporters at a conference.

L&T Infotech is a mid-sized company, with annual revenues of $287 million, in FY07. While there has been speculation about L&T’s plans to list the company, Mr Naik and senior company officials have maintained that a public float could only be next year.

L&T Infotech plans to invest around Rs 1,000 crore in the next 3-4 years. “We have planned an investment of around Rs 500-600 crore for L&T Infotech and nearly Rs 200-300 crore for our engineering services businesses,” said Mr Naik.

Read more in The Economic Times article.

L&T may list 8 subsidiaries by 2015

In the next eight years, Larsen & Toubro hopes to list at least eight of its wholly owned units in a bid to unlock shareholder value.

Highly placed sources revealed that among the first lot of subsidiaries to head towards the stock bourses are its infrastructure subsidiary L&T Infotech, which is growing at a compounded annual growth rate of 60% per annum.

According to the official, the listing of its infotech subsidiary could be as early as October 2007. It has set a target year of 2015, to list the eight subsidiaries.

Confirming the strategy, Y M Deosthalee, CFO and member of the board at L&T, told DNA Money: “Apart from L&T Infotech, which is slated to list by the year—end, the company is considering three more subsidiaries to list over the next three years.” The list also includes its financial subsidiary, Deosthalee indicated.

Read more in The DNA Money article.

Tata Power signs $1 bn deal with Korean firm

Tata Power Company, which is developing India’s first 4,000 mw ultra mega power project (UMPP) in Mundra, today signed contracts reportedly worth $1 billion with Korea’s Doosan Heavy Industries & Construction Company for supply of super-critical boilers and development of ancillary civic structures.

The order, which includes five units of 800 mw each, comes about three weeks after the company formally took over the reins of the project in Gujarat, which is based on imported coal.

While the company has 64-69 months under the contract to commission the first unit, it expects to advance the schedules “ahead of the bid stipulation”. This means that the first unit would be commissioned within the 11th Plan period itself (2007-2012).

Tata Power bagged the Rs 16,000 crore Mundra project against competition from the likes of Sterlite, Adani, Essar, Reliance Energy and L&T by committing to supply power at the the lowest rate of Rs 2.26 a unit (a levelised rate for 25 years).

Read more in The Business Standard article.