L&T Seeks Shareholders' Nod to Raise $600 Million

New Delhi: Engineering and construction giant Larsen & Toubro (L&T) has sought approval of its shareholders to raise up to $600 million through securities to meet capital requirement of growing business.

"The Board be and is hereby authorised to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign... that the total amount raised through issue of the Securities shall not exceed Rs 3,600 crore or $600 million," it said in a notice for the annual general meeting.

It said the shareholders through a resolution passed by postal ballot on July 14, 2014 had approved issue of securities for an aggregate sum up to $600 million but the nod for QIP issuance was valid only for 12 months and "accordingly, the Shareholders' approval is sought for the same".

It said the company requires adequate capital to meet the needs of growing business.

The fundraising may be through a mix of equity and equity-linked instruments, it said, adding that members' approval is sought for the issue of securities linked to or convertible into equity shares or depository receipts of the company.

"Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5 per cent of the paid-up capital of the company," it said.

L&T said it may also opt for issue of securities through qualified institutional placement (QIP).

"A QIP of the shares of the company would be less time consuming and more economical than other modes of raising capital," it said.

These securities will be allotted only to qualified institutional buyers (QIBs) as per Sebi regulations and there will be no issue to retail individual investors and existing retail shareholders, it said.

"The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the board based on an analysis of the specific requirements after consulting all concerned," it said.

Therefore, the proposal seeks to confer upon the board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue, it added.

The company had reported a sharp fall of 37.3 per cent in consolidated net profit to Rs 606.19 crore for the first quarter of the current fiscal on slower execution of some projects and higher expenses.

Shares in L&T, on Wednesday, ended 0.25 per cent higher at Rs 1,778.50 apiece on the BSE.