The Larsen & Toubro board would be meeting within the next two weeks to finally approve the scheme of arrangement for the demerger of its cement business.
A detailed scheme of arrangement has been developed by the L&T management in compliance with regulations.
Y M Deosthalee, chief financial officer of L&T said, "We are set to place the scheme of demerger in front of the board. The board meeting would be scheduled within two weeks. The procedure of seeking other required regulatory approvals would be followed by the board meeting."
"The L&T employee trust has also been formed. The board would also consider the mode of funding the acquisition of Grasim's stake in L&T by the foundation," he added.
He, however declined to divulge further details. The foundation would be investing Rs 470 crore in acquiring L&T shares from Grasim.
The scheme translates into Kumar Mangalam Birla acquiring 51.5 per cent controlling interest in a 16.5 million tonne cement company for a net investment of Rs 2,200 crore (Rs 22 billion). Birlas then emerges as India's largest cement producer with a combined capacity of 31 million tonne.
L&T has decided to demerge its cement business into a separate cement company - CemCo, in which L&T will retain 20 per cent of the equity while the balance equity will be distributed to its shareholders, in proportion to their shareholding in L&T.
At the same time, as per the terms of agreement of the deal, Grasim will acquire an 8.5-per cent equity stake in Cemco from L&T for Rs 171.30 per share.
Grasim would then make an open offer at the same price, for 30 per cent of the equity of CemCo thereby acquiring the management control of CemCo.
Arm bags $100m Motorola order
L&T Infotech, an L&T subsidiary, has bagged a $100 million order from Motorola to be spread over 4-5 years. The order is pertaining to the implementation of SAP and mainframe.
The company would be recruiting more staff for the execution of the order. The impact of the order would however be seen on the financial results in 2004.