Welspun Infra Projects, a closely held entity of the Welspun group, on Friday said it would acquire 35 per cent stake in Leighton Contractors India, the Indian operations of Australian infrastructure major Leighton International, for Rs 470 crore.
The new company, which will be called Leighton Welspun, plans to bid for projects in road, railways, power, ports which will be developed on a build, operate and transfer (BOT) basis. The joint venture will pursue infrastructure opportunities in India as well as neighbouring countries like Sri Lanka.
Welspun Infra, which is yet to win an infrastructure development contract, says it has a pipeline of projects in various stages of bidding and finalisation. It says the joint venture with Leighton Contractors, which specialises in engineering, procurement and construction (EPC), will add technical capabilities and expertise to its business. In the joint venture, Welspun will concentrate on project development and bidding while Leighton will be responsible for project management and EPC.
“As Welspun continues to expand, we foresee great potential in the $500-billion Indian infrastructure sector and other neighboring countries and look forward to this strategic partnership as a catalyst for growth,” said B K Goenka, Chairman, Welspun. The Indian business of Leighton has an order book of Rs 4,000 crore and has interests in oil and gas, pipelines and other infrastructure projects on an EPC basis. Internationally too, Leighton concentrates on construction business and has an order book of over $40 billion.
“A partner like Welspun, which has strong interest in developing infrastructure, complements Leighton’s extensive project development and delivery experience in India and internationally. India’s construction sector is forecast to grow at 10 per cent annually over the next three years, and more than $120 billion is set to be spent in 2011 alone. Our partnership with Welspun will allow us to bid very competitively for this upcoming infrastructure work, “ said David Savage, Chief Operating Officer, Leighton Holdings.
The transaction is subject to customary statutory, regulatory and other corporate approvals and is scheduled to be completed in the next 90 days.
