L&T to raise $300 million from overseas issue
23 Mar 2006
Engineering major Larsen & Toubro would raise up to $300 million from an overseas issue of foreign currency convertible bonds or depository receipts. The company''s board, which met yesterday, has approved the issue and details of the issue would be finalised later.
L&T said the funds raised from the issue would be used to part-finance expansion and investment plans including acquisitions. The issue is subject to shareholder and regulatory approval.
Indian engineering companies are riding the boom in industrial investments and their order books are at record levels. Large investments in the infrastructure sector, both by the government and the private sector, are also resulting in significant business for the engineering sector.
The company had won significantly large projects in the recent months, including major overseas orders from the Middle East and South East Asia. The company is giving much attention to countries in the Middle East which are seeing an investment up swing as a result of higher oil prices.
L&T has plans to enter the power generation business. The company is already the leading construction contractor for power projects and is planning to leverage that expertise. It has already bid for 3 small hydro-electric projects in the state of Himachal Pradesh. From next year, the company would start bidding for bigger projects of up to 250 MW.
A consortium led by L&T and Siemens is building a new international airport at Bangalore at a cost of more than $300 million. The company has teamed up with Hutchison Whampoa of Hong Kong to enter the seaports management segment. The consortium has already bid for the new Mumbai port project.
L&T had also acquired a Bangalore based mid-size defence electronic research company earlier this year.
The company''s order book, which is more than Rs25,000 crore at present, is expected to cross Rs28,000 crore by the end of the current financial year.
L&T had reported net profits of Rs259.27 crore or Rs19.39 per share on revenues of Rs3,782.79 crore for the quarter ended December 2005. For the pervious quarter ended September 2005,