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Larsen & Toubro plans to raise about Rs 6,000 crore through non-convertible debentures for capital expenditure, equity infusion in subsidiaries and debt repayment in the current fiscal. The company will be seeking shareholders' nod to raise the capital through debentures as stipulated in the Companies Act.
Additionally, L&T will be seeking shareholder approval to raise $600 million ( around Rs 3,500 crore) through equity and hybrid instruments such as Qualified Institutional Placement (QIP), foreign currency convertible bonds and so on. A senior company executive said the the proposal to raise $600 million is an enabling in nature because as per rules shareholder approval for a QIP is valid for a year and the existing approval is due to lapse.
As of March 31, L&T had a total debt of Rs 11,500 crore on a standalone basis of which about Rs 8,500 crore debt is long term in nature. The annual debt repayment is around Rs 1,000 crore. "We will be seeking share holders nod through a postal ballot. The amended Companies Act requires companies to seek shareholder approval for long term debt instruments which are tradeable on stock exchange. We are seeking approval for Rs 6,000 crore but in reality we may raise only about Rs 3,000-4,000 crore in debentures,'' he said. The capex funding will be largely maintenance related including replacement and overhaul of plant and machinery both in India and Gulf region, he added.
L&T exceeded in revenue and profit guidance reporting 69% rise in net profit in Q4 2014 as against the same quarter last fiscal. Net profit on a stand alone basis stood at Rs 2,723 crore in Q4 FY14 as against Rs 1,609 crore in same period last year.
L&T's performance is better than expectation. We have grown our international business and we have been able to get over the storm,'' executive chairman A M Naik said while announcing the company's results last month . Naik said long delayed infrastructure projects should gain momentum with the change of government and expects visibility like project tendering by August-September.
