Canada Pension Plan to invest Rs 2,000 crore in L&T

 CPP Investment Board Singaporean Holdings I (CPPIBSH), a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), has entered into a definitive agreement with Larsen & Toubro Ltd. (L&T) to initially invest Rs 1,000 crores in L&T’s subsidiary, L&T Infrastructure Development Projects Limited (L&T IDPL).
 
CPPIBSH is also committed to a second tranche of Rs. 1,000 crores, to be invested 12 months following the initial investment.
 
“Under the agreement, CPPIBSH will invest in L&T IDPL preference shares which will be compulsorily convertible into equity shares by 2018 at a valuation to be determined by a mutually agreed process. Post conversion, CPPIBSH will hold a minority stake in the equity capital of L&T IDPL,” a CPPIB press release said.
 
According to André Bourbonnais, Senior Vice-President, Private Investments, CPPIB, “This transaction represents CPPIB’s first investment in India’s infrastructure sector with a highly reputable partner and fits well with our strategy for India as a key long-term growth market.”
 
This would be the first direct private investment by a Canadian pension fund into an Indian infrastructure development company. R Shankar Raman, Chief Financial Officer and Member of the Board, L&T, said, “With its long term view, CPPIB would be an ideal partner for L&T and will provide growth capital to L&T IDPL to expand its infrastructure development business.”

27