L&T to raise Rs 2,800cr, build shipyard

Gets shareholders' approval for GDR issue at Luxembourg Stock Exchange.

Larsen & Toubro (L&T), the country's biggest construction and engineering company, announced it would raise Rs 2,800 crore ($700 million) through a global depository issue (GDR), most of which will be used to build a new shipyard.

The proposed equity sale would take place at Luxembourg Stock Exchange, Chairman A M Naik told shareholders at the company's 62nd annual general meeting. The company had offered two bonus issues "� one 3:5 in 1986 and 1:1 last year.

The fund will be used to part finance L&T's capital expenditure of Rs 4,500 crore this year. Of this, about Rs 2,000 crore will be utilised for setting up the shipyard on 500 acres.

The company is also seeking a yen-denominated loan equivalent to $200 million (Rs 800 crore) from Barclays Plc, HSBC Holdings Plc and Citigroup Inc, according to bankers.

"We have shortlisted two sites, one in Gujarat and another in Tamil Nadu, for the shipyard. We will announce the exact location next month," Naik said.

L&T is one among four companies that is keen to build two mega shipyards of international standard. The other companies are Korean STX, Shapoorji Pallonji and Bharti Shipyard.

A report earlier this month quoted a government official as saying that the shipping ministry had identified Kakinada, Ennore and Tuticorin on the east coast and Mundra and Pipavav on the west coast.

L&T is also joining the special economic zone (SEZ) bandwagon. It has decided to set up two SEZs. Naik said the engineering services SEZ would come up in Vadodara. The other one would come up near the company's proposed shipbuilding facility.

Describing the outlook for the company, Naik said that the company had targeted a 25 per cent growth in revenue at Rs 23,000 crore by the end of this year.

Consolidated revenue, taking the subsidiaries and associate companies into account, may go up to Rs 26,000 crore by the year-end from Rs 21,000 crore last year.

The L&T stock today closed at Rs 2,443.8 on the BSE, 1.98 per cent higher.

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BULDING SPREE

Fund to part finance capital expenditure of Rs 4,500 crore this year

Rs 2,000 crore for shipyard to be set up either in Guj or TN

The company is also seeking a yen-denominated loan equivalent to $200 million