InvestorQ : Why is Larsen & Toubro exiting the power business too?
Riya Dwivedi made post

Why is Larsen & Toubro exiting the power business too?

shrinidhi Rajan answered.
2 years ago

While the final divestment has not happened, L&T is currently in talks to merge its thermal power business with the Indian unit of Sembcorp of Singapore. It will be a share swap deal but will help L&T to reduce its overall group level debt. The combined business of L&T Thermal Power and Sembcorp is likely to be valued at an enterprise valuation of $4.5 billion. In addition, L&T is also likely to move debt of Rs.10,000 crore to the merged entity.

For L&T, it is a combination of deleveraging and putting back the focus on its core business. In the last few years, L&T has been trying to divest many of its non-core business and focus on Engineering, Procurement and Construction (EPC) business. Sometime back, L&T had sold its electrical and automation business to Schneider. Much earlier, L&T had also sold its cement business, which eventually merged into Grasim and became Ultratech.