L & T Mops Up $104 Million Term Loan

Larsen & Toubro (L&T) has raised raised $104 million through a term loan at 55 basis points over Libor. The loan will get transferred to its proposed cement subsidiary post-demerger of the business.

The deal was lead arranged by ABN Amro Bank NV, Citibank/Salomon Smith Barney and Hongkong & Shanghai Banking Corporation, the company said in a press release.

According to the company, the facility has a door-to-door duration of over three years and six months and an average maturity of two years and six months.

The loan structure is unique considering that though the initial borrower is L&T, the loan would eventually get transferred to the new company formed after the cement business is hived off and a strategic partner is inducted.

L&T is currently in the final stages of the proposed demerger. Holderbank of Switzerland, Lafarge of France and Cemex of Mexico are left in the race for the 37.5 per cent stake in the largest cement company of India.

L&T has decided to offer equal stake to its strategic partner at the initial stage itself. Previously, the company was planning to offer minority stake to the partner in the initial stage.

Shares of L&T ended two per cent higher at Rs 218.50 on the Bombay Stock Exchange today.