L&T to sell Tamil Nadu port stake, raise Rs 2,500 cr
L&T will sell significant minority stakes in its Kattupalli port project near Chennai and other infrastructure assets to raise funds to retire debt and to finance future investments, according to sources close to the development.business Updated: Feb 08, 2014 00:57 IST
L&T will sell significant minority stakes in its Kattupalli port project near Chennai and other infrastructure assets to raise funds to retire debt and to finance future investments, according to sources close to the development.
The company, with interests in engineering, construction, manufacturing and financial services, had invested about Rs 4,000 crore on the Kattupalli International Container Terminal, in which it owns a 97% stake. It now wants to sell a minority stake to raise Rs 2,000-2,500 crore. The identity of the potential buyers wasn’t immediately clear.
Responding to HT’s queries, the L&T spokesperson said: “As with any large business organisation, we regularly review our portfolio and always examine new business opportunities and facilities.”
Apart from the commercial port, Kattupalli also has facilities to build ships, including warships and submarines for the Indian Navy. “But shipbuilding orders have not materialised,” said a Mumbai-based analyst at a large brokerage firm on condition of anonymity as he is not authorized to speak to the media.
L&T Shipbuilding, the subsidiary that owns this port, also operates another port in Surat, on India’s west coast.
“L&T’s subsidiaries will take time to stand on their own feet,” said the analyst. “Infra companies are cash guzzlers and the payback time is usually quite long. L&T has sizeable debts tied up in these ventures (that needs to be serviced),” the analyst added.
The company is believed to be keen on the Mumbai Trans Harbour Link. “L&T would need to have substantial funds to go after such projects,” said the analyst.