Finance Update

L&T: L&T sells 51% stake in JV to partner Kobe Steel for Rs 43.5 crore

The stake sale is a part of L&T’s strategy to exist some non-core businesses or subscale businesses.

Apr 03, 2019, 05.02 PM IST

Reuters

L&T Kobelco Machinery reported revenue of Rs 82.03 crore in 2017-18

Kobe Steel

of Japan, for Rs 43.5 crore, the Indian engineering major informed bourses on Wednesday.

The stake sale is a part of L&T’s strategy to exist some non-core businesses or subscale businesses, to focus more on its core business of engineering and construction and services.

L&T Kobelco Machinery reported revenue of Rs 82.03 crore in 2017-18, which accounted for 0.075 of L&T’s consolidated total income for the year. LTKM had reported a net worth of Rs 40.13 crore as on March 31, 2018, of which L&T’s 515 share was worth Rs 20.47 crore. On completion of the deal, L&T Kobelco Machinery will cease to be a subsidiary of L&T.

“The share purchase agreement has been executed on April 2, 2019. Subject to customary closing conditions, the sale of shares is expected to be completed before the end of April, 2019,” the disclosure stated.

L&T and Kobe Steel formed a joint venture to manufacture machinery used in rubber industry, especially in tyre manufacturing, in 2010. The JV built as manufacturing capability at Kanchipuram near Chennai in Tamil Nadu that has been operational since 2012.

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Source

Prakash Poojary
Business Analyst

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