L&T to split into independent units
Engineering and construction major Larsen & Toubro is in the process of splitting its businesses into smaller units. HT reports.business Updated: Jan 05, 2011 22:26 IST
Engineering and construction major Larsen & Toubro is in the process of splitting its businesses into smaller units. The restructuring project — Lakshya 2 — which began in October-November 2010 will be concluded over the next 12 months, said a company official on the condition of anonymity.
Project Lakshya 1 was scheduled for the period 2005-2010. Under the process, the company plans to split its businesses into nine units that will be headed independently and listed as separate entities by 2015.
The restructuring process is being advised by Bain & Co and Mckinsey. The move aims to streamline the complex structure of the company that has evolved as a result of its numerous business interests over the years, the company said.
Market experts feel the move will lead to efficient management. “As a result of this, managing a company like L&T will become easier and efficient and will unfold benefits for investors too,” said Alex Mathew, head of research, Geojit BNP Paribas Financial Services.
L&T chairman AM Naik is set to retire by 2012 and going by the timeline the company has projected for the restructuring process to get completed, it will be well before Naik hangs his boots as executive chairman. The company’s share prices fell 2.1 % on Wednesday to close at R1,930 on the Bombay Stock Exchange.