L&T raises $125 m via FCCBs

Larsen & Toubro (L&T) today raised $125 million (approximately Rs 575 crore), through a foreign currency convertible bonds (FCCB) issue.

The company has raised these bonds to support its growth plans, which include both organic and inorganic growth.

"L&T is looking to grow both organically and inorganically and the resource base is expected to provide flexibility to the company to look at acquisitions," the company said.

L&T had received an approval from its shareholders to raise $250 million through the FCCB route at its annual general meeting held in September this year.

Senior company officials told Business Standard, "We have decided to raise $125 million in accordance with the company existing capital requirements and keeping in mind the current financial scenario."

The FCCB, which will be listed on the Hong Kong Stock Exchange have a maturity of five years and are redeemable at a premium to provide a yield to maturity of 4 per cent per annum. The bonds are convertible into global depository shares at a premium of 35 per cent over the Bombay Stock Exchange closing share price of the L&T scrip at Rs 831.70, as on November 1, 2004.

The bonds can be converted anytime after the 41st day after the closing the issuance until the close of a business on the 7th day prior to maturity.

"The bonds are non callable for a period of three years, after which the company has the right to call these bonds subject to a call hurdle of 130 per cent of the conversion price," the company said in a statement to the press.