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Restructuring module splits L&T into nine firms

Restructuring module splits L&T into nine firms
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First Published: Mon, Jan 24 2011. 05 44 PM IST
Updated: Mon, Jan 24 2011. 05 44 PM IST
Mumbai: L&T Ltd, diversified engineering conglomerate, will form a holding company under which it will house its nine independent companies to maintain growth, profitability and shareholder value, P.J. Nayak, a senior company official and member of the company board said. The new structure will have the potential to grow four fold in next 10 years, he told at a media conference.
Each of the nine companies will have independent board of directors, chief executive with internal governance panel and a corporate centre to nurture L&T brand and to tap synergies among its clients. Each of the board will have external independent directors.
The growth will primarily be driven by power segment—thermal, nuclear, hydel and non-conventional sources and defence supported by its core sectors in hydrocarbon, infrastructure and engineering.Engineering and construction accounts for nearly 80% of the company’s revenues.
The nine sectors for which companies will be formed are building and materials, civil infrastructure, mechanical-metal handling and supply of equipment for steel industry, electric power transmission and distribution, hydrocarbon and chemicals, heavy engineering catering to defence and aerospace, electrical equipments and automation products, mechanical and industrial products and power equipments and building power plants.
Apart from nine companies, L&T will have five subsidiaries ---of which three of them are L&T Finance Ltd, L&T IDPL, L&T Infotech Ltd. The fourth one will be to build metro projects and fifth to build power plants. The subsidiaries will be listed on the exchanges and L&T Finance will be the first to list when the market is ready.
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First Published: Mon, Jan 24 2011. 05 44 PM IST
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