Larsen & Toubro (L&T) has inked an agreement with CPP Investment Board Singaporean Holdings 1 (CPPIBSH), a wholly-owned subsidiary of Canada Pension Plan Investment Board, for an initial investment of Rs.1,000 crore.
Under the agreement, CPPIBSH will invest in L&T Infrastructure Development Projects Ltd (L&T IDPL), an arm of L&T. This initial investment will be followed by a second tranche of Rs.1,000 crore, or higher amount, after 12 months subject, of course, to regulatory approvals.
"CPPIBSH will invest in preference shares of L&T IDPL, compulsorily convertible into equity shares by 2018 at a valuation to be determined as per a mutually agreed process. Post-conversion, CPPIBSH will hold a minority stake in the equity capital of L&T IDPL," L&T said.
This would be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company.
The completion of the transaction and receipt of funds is subject to fulfilment of certain closing conditions.
Source The Hindu
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