Financial Daily from THE HINDU group of publications
Friday, Jun 09, 2006
Financial Daily from THE HINDU group of publications Friday, Jun 09, 2006 |
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Corporate
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Alliances & Joint Ventures L&T forms jt venture with Malaysian co SapuraCrest Our Bureau
Venture plans L&T will hold 60 per cent equity stake, and SapuraCrest 40 per cent stake in the joint venture. The vessel will help L&T exploit the sub-sea pipe-laying and installation opportunities across India, West Asia, South-East Asia and other neighbouring areas
JOINT VENTURE PLANS: Mr A.M. Naik (right), Chairman & Managing Director, Larsen & Toubro Ltd, and Tan Sri Shamsuddin, Chairman, SapuraCrest Petroleum Berhad, at a press conference in Mumbai on Thursday. - Shashi Ashiwal
Mumbai , June 8 Larsen & Toubro has entered into a joint venture (as yet unnamed) with Malaysian company SapuraCrest Petroleum Berhad to build a $100-million derrick-cum-pipe-laying barge. L&T will hold 60 per cent equity stake, and SapuraCrest 40 per cent stake in the joint venture which L&T described as a strategic effort, allowing it to enter a field where no Indian company is in operation. With this vessel (which will be an Indian flag vessel) L&T can exploit the sub-sea pipe-laying and installation opportunities across India, West Asia, South-East Asia and other neighbouring areas, said Mr A.M. Naik, Chairman & Managing Director, L&T. Currently there are three Korean companies (such as Hyundai) in operation in the Indian zone and L&T wouldbecome the fourth operator, he said.
Dimension of installation
The vessel, which would be completed in the fourth quarter of 2008, could bring in revenues of between $50 million and $70 million (Rs 225 crore and Rs 490 crore) annually, said Mr Naik. There would be a commitment by L&T and SapuraCrest to use the barge for 140 days each yearly. "To L&T's new capabilities of engineering procurement and construction, the new dimension of installation will be added," he said. For SapuraCrest, this joint venture is the latest in a series of efforts to ensure that it possesses the right technology, infrastructure, reach and human capital to address the needs of its clients from India to Australia, said Mr Datuk Shahril Shamsuddin, Executive Vice-Chairman, SapuraCrest Petroleum. The barge project cost wouldhave a debt component of around 70 per cent for which the joint venture would be raising funds, likely in foreign currency since its business wouldearn foreign exchange and provide a natural hedge, said Mr Y.M. Deosthalee, Chief Financial Officer, L&T.
More Stories on : Alliances & Joint Ventures | Engineering | Larsen & Toubro Ltd
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