Larsen & Toubro completes investment agreement with Canada Pension Plan

Larsen & Toubro (L&T) on Thursday said it has completed the definitive investment agreement with Canada Pension Plan Investment Board (CPPIB) for investment worth Rs 2,000 crore in the engineering firm.

CPPIB, through its subsidiary CPP Investment Board Singaporean Holdings 1 (CPPIBSH) has made an initial investment of Rs 1,000 crore in L&T Infrastructure Development Projects Limited (L&T IDPL) on December 16 by way of subscription to compulsorily convertible preference shares.

This initial investment will be followed by a second tranche of Rs 1,000 crore, or a higher amount as may be agreed between the two, 12 months after, a release issued in the financial capital said.

The pact, which was signed in June 2014, was made between L&T and a wholly-owned subsidiary of CPPIB, for investment into Mumbai-based conglomerate's subsidiary L&T IDPL, the release said.

The investment marks a first direct private investment by a Canadian pension fund into a domestic infrastructure development company.

L&T IDPL's business includes development of roads and bridges, ports, metro rail, power transmission lines, wind energy and emerging sectors such as water and railways. It handles infrastructure assets with an estimated project cost of US $7.5 billion comprising 23 projects across sectors.