L&T, CPPIB divest stake in L&T Infra Projs to Edelweiss SPV for Rs 2,723 cr- QHN

Engineering major Larsen & Toubro (L&T) on Saturday said that it had along with joint-venture partner Canadian Pension Plan Investment Board (CPPIB) divested their stakes in L&T Infrastructure Development Projects (IDPL) for Rs 2,723.40 crore.The enterprise value of the transaction has been pegged at Rs 6,000 crore.

The acquirer is Epic Concesiones, which is a special vehicle purpose (SPV) floated by Infrastructure Yield Plus II, an infrastructure fund managed by Edelweiss Alternative Asset Advisors. The portfolio includes eights roads and one power transmission asset.

L&T IDPL is a 51:49 JV between L&T and CPPIB. CPPIB had invested in the JV in 2014. Both would cease to be investors in the company following the transaction, L&T said.

In a separate statement on Saturday, Edelweiss Alternative Advisors said that the deal was subject to regulatory approvals and would increase the number of infra assets under management to 26 across 13 states. Persons in the know say that the deal is likely to close by the end of FY23.

In a conversation with Business Standard in November, L&T executive director and chief financial officer, R Shankar Raman, had indicated that the company was likely to announce the divestment of its infra assets by December-end.

“We are fairly advanced in our exit discussions for the road concessions. All going well, we should be able to ink the divestment deal by the end of the December quarter. It will be subject to a lot of regulatory approvals, which could take 2-3 months to get completed,” Raman had said.

L&T’s IDPL was put on the block as part of the company’s divestment plan under its ‘Lakshya 2026’ roadmap, which was put in place earlier this year. Apart from L&T IDPL, the company had also put Hyderabad Metro and Nabha Power on its divestment list. Raman had said that the exit out of the latter two companies would happen slowly since the engineering major was seeking a fair valuation for these businesses.

L&T IDPL’s revenue for FY22 was Rs 128 crore, constituting around 0.08 per cent of the consolidated revenue of L&T for the year. Its net worth stood at Rs 2,521 crore as on 31 March 2022, L&T financial statements showed.

L&T IDPL has 13 subsidiaries, which includes Ahmedabad-Maliya Tollway, L&T Deccan Tollways, L&T Interstate Road Corridor, L&T Rajkot-Vadinar Tollway, L&T Samakhiali Gandhidham, L&T Sambalpur Rourkela, L&T Transportation Infrastructure, L&T-Chennai Tada Tollway, Panipat Elevated Corridor, PNG Tollway, Vadodara Bharuch Tollway, LTIDPL Indvit Services and Kudgi Power Transmission.

Sreekumar Chatra, managing director, Infrastructure Yield Strategy, said that the acquisition would help scale up the Edelweiss-Alternatives-backed platform.