looks to complete sale of Satyam stake by March next
MUMBAI: Larsen & Toubro (L&T)
plans to exit from its investment Mahindra Satyam, formerly Satyam
Computer Services, once the lock-in period expires in October, and is aiming to
complete the transaction by the end of the current fiscal, chairman AM Naik said
The country’s largest engineering company expects to make a profit of up to Rs
250 crore from its 12% stake in Mahindra Satyam, Mr Naik told shareholders at
the company’s AGM. “We have provided for a loss out of abundant caution. As of
today, we are running a net profit of Rs 350 crore and I expect by the time we
sell them, we’ll make a net profit, excluding tax of Rs 200-250 crore,” Mr Naik
The country’s largest engineering firm had bought into Mahindra Satyam and also
joined the race to buy the Hyderabad-based software company, before losing out
to Tech Mahindra, the telecom arm of the Mahindra & Mahindra group. Shares of
Satyam on Friday fell 0.5% at Rs 113.85 on BSE.
Under Sebi norms, bidders for Satyam are barred from selling stakes acquired
prior to the bid (for Satyam) for six months, as they had access to Satyam’s
financial information that was not public at the time. Under this condition, L&T
can sell its holding in Mahindra Satyam after October 14.
Mumbai-based L&T, which focuses largely on the power, oil and gas and
engineering sectors, said it has already booked orders totalling Rs 10,000 crore
last month and is expecting an additional Rs 10,000-crore orders next month.
This includes a contract for roads worth Rs 1,400 crore for a project in Tamil
The company has been seeing increased activity both locally and overseas, as
governments worldwide stepped up their investments in public projects to revive
economies, post recession. L&T recently got four orders from Qatar, UAE & Oman,
aggregating $217.45 million (around Rs 1,044 crore) for building electrical
sub-stations. It had also got a $153.45-million (Rs 736 crore) contract from
Qatar Petroleum to build four sub-stations at Ras Laffan.
L&T also got contracts worth Rs 5,300 crore to build offshore platforms for ONGC,
signalling a return of large orders from hydrocarbon companies and also setting
the stage for similar contracts from power companies. L&T got the current
contracts after beating global biggies, such as Samsung, Hyundai and NPCC.
Separately, the company’s subsidiary, L&T finance said it would be able to raise
Rs 1,000 crore through an ongoing redeemable non-convertible debentures issue.
The issue closes on September 4.