L&T to dilute stake in non-core biz: Naik

L&T to dilute stake in non-core biz: Naik
Highlights

L&T to dilute stake in non-core biz: Naik. Infrastructure major, Larsen & Toubro is looking to sell some of its assets including roads and infrastructure projects and dilute its stake in non-core subsidiaries to revive performance, the group\'s executive chairman AM Naik said on Wednesday.

Mumbai: Infrastructure major, Larsen & Toubro is looking to sell some of its assets including roads and infrastructure projects and dilute its stake in non-core subsidiaries to revive performance, the group's executive chairman AM Naik said on Wednesday.

Bain Capital agreed to buy a 10% stake in L&T Finance Holdings, Canadian pension fund to buy a chunk of L&T Infra Projects

He said L&T, a sprawling $21 billion group, remained far too complex and needed to improve its return on equity by exiting some infrastructure businesses and selling minority stakes in operations no longer as essential to the company.

"I am trying to reduce the smaller businesses and sell them. If I can do something about heavy asset companies, some of it we could exit or sell, our return on equity will improve," he said.

L&T, which makes anything from metro trains to submarines to parts for nuclear reactors, will also appoint individual unit chief executives and individual boards to encourage independence and boost returns among its more than 70 businesses, Naik said.

Bain Capital has agreed to buy a 10% stake in L&T Finance Holdings, its financial services arm. Last year L&T agreed to sell a chunk of L&T Infrastructure Development Projects Ltd to a Canadian pension fund.

Naik said that process would be extended as the company worked with consultants on a five-year plan to simplify the group and hand greater independence to individual units.

L&T has disappointed investors in recent quarters with worse-than-expected revenue growth, in part because of a slowdown among Middle Eastern oil and gas clients and continued weakness in India where new orders remain slow.

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