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CPPIB to invest in L&T IDPL

India Blooms News Service | 23 Jun 2014, 04:37 pm
Mumbai, June 23 (IBNS): Engineering major Larsen & Toubro Limited (L&T) has entered into a definitive investment agreement with a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), CPP Investment Board Singaporean Holdings 1 (CPPIBSH), for an initial investment tranche of `1,000 crore, to be invested by CPPIBSH into the company’s subsidiary L&T Infrastructure Development Projects Limited (L&T IDPL).

This will be followed by a second tranche of `1,000 crore, or such higher amount as may be agreed between the company and CPPIBSH, after twelve months from the date of the initial investment subject to any required regulatory approvals at such time.

CPPIBSH will invest in preference shares of L&T IDPL, compulsorily convertible into equity shares by 2018 at a valuation to be determined as per a mutually agreed process.

Post conversion, CPPIBSH will hold a minority stake in the equity capital of L&T IDPL.

This would be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company.

R Shankar Raman, Chief Financial Officer and Member of the Board, L&T, said, “We are pleased to form this new partnership with CPPIB. With its long term view, CPPIB would be an ideal partner for L&T and will provide growth capital to L&T IDPL to expand its infrastructure development business.”

 

According to Mr. André Bourbonnais, Senior Vice-President, Private Investments, CPPIB, “This transaction represents CPPIB’s first investment in India’s infrastructure sector with a highly reputable partner and fits well with our strategy for India as a key long-term growth market. We look forward to partnering with L&T and L&T IDPL’s experienced management teams as we build our infrastructure platform in India over the long term.”

 

The completion of the transaction and receipt of funds is subject to fulfillment of customary closing conditions for transactions of this nature and procuring necessary approvals from relevant government authorities and regulators.

CPPIB to invest in L&T IDPL

India Blooms News Service
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