Engineering and construction giant Larsen and Toubro (L&T) plans to sell its portfolio of roads, metro, power, port and transmission assets worth more than Rs.7,000 crore to free up capital and invest the funds in infrastructure projects likely to be awarded by the Centre.Monetising assetsThe company is planning to monetise assets held by its subsidiary L&T Infrastructure Development Projects Ltd (L&T IDPL) which include 12 operational road projects, 1,400 MW power plant in Punjab, 400 kilometres of transmission lines in Karnataka, 71 kilometres of Hyderabad metro and Kattupalli port located at Ennore near Chennai.“We are in talks with buyers to divest our stakes in roads, power and transmission projects to free up our capital so that we can invest in other developmental projects,” R Shankar Raman, Chief Financial Officer of L&T said.He said the company has invested about Rs.4,000 crore in non-power infrastructure comprising roads, ports, metro and transmission lines and Rs.3,000 crore in projects including power generation.L&T is in talks with Canada’s Canada Pension Plan Investment Board (CPPIB) to sell its entire portfolio of operational road projects, making it one of the biggest deals in the roads sector.When asked about CPPIB as a potential buyer, Raman said: “All of our projects are under SPVs and it will be a shared transaction rather than anything else. CPPIB is an existing investor in IDPL and that way they are already in the house. So anything we are doing, they know.”
L&T’s power project has installed capacity of 2,100 MW (700X3) of which 1,400 MW is operational and the company wants to give flexibility to the buyer to enhance its capacity to 2,100 MW.Potential buyersOn possible buyers for the power unit, Raman said: “This is a readymade plant. I wish I could get 2x or 3x of investments. But it all depends on the offtake as there is surplus capacity. This would be useful to somebody who will be an aggregator and there are interested people for this asset.”
Adani Power and Tata Power are tipped to be potential buyers for L&T’s power project, which has a long-term power purchase agreement with Punjab.We are in talks with buyers to divest our stakes in roads, power and transmission projects to free up our capital so that we can invest in other developmental projectsR. Shankar RamanCFO, L&TIt is in talks with Canada Pension Plan Investment Board to sell its operational road projects