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L&T refers cement business revamp plan to ICRA

MUMBAI FEB. 15. The decision on restructuring of Larsen and Toubro's cement business has been delayed once again with its board today deciding to refer the two proposals — of a vertical split or demerge cement business — to ICRA, leading rating agency.

The board decided to refer both proposals to ICRA and the terms of reference for mandate to the rating agency are being worked out, the L&T Executive Vice President, M. S. Krishnamurthy, told reporters after the board meeting here. According to company sources ICRA is likely to take at least 30-45 days to come out with its findings.

The Grasim Industries Chairman, Kumarmangalam Birla, who attended the meeting with his mother, refused to comment on the proceedings of the board meeting. Meanwhile, two new nominees of the Life Insurance Corporation of India, K. S. K. Khare, replacing A. Ramamurthy, and Kranti Sinha, were inducted on the board, taking the total strength to 18.

The additional nominee of LIC comes in the wake of it becoming the single largest institutional investor with a stake of over 18 per cent.

The decision on restructuring by demerging the cement business was recommended by the Boston Consulting Group in 2000 and has been hanging on fire for quite some time even as Grasim, which now has over 15 per cent stake in the company, has suggested splitting the cement business into a separate entity. At the last board meeting on January 28, the directors took the proposal of Grasim on record and discussed a proposal of CDC of the U.K., which offered to pick up a 6.86 per cent stake in the demerged entity. The offer was valid only up to December 31, which was extended by a month.

— PTI

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