Larsen to divest entire stake in L&T Metro Rail (Hyderabad) for Rs 1,461 cr

LT said in an exchange filing that it has executed a share purchase agreement with Hyderabad Metro Rail Limited, a Government of Telangana Enterprise, for disposal of its entire shareholding in LT Metro Rail Hyderabad Ltd, a subsidiary of the company, for a consideration of Rs 1,461.47 crore. Upon the transaction likely to be completed by the end of June, LT Metro Rail Hyderabad Ltd LTMRHL would cease to be a subsidiary of the company, the filing said.

Infrastructure major Larsen & Toubro (L&T) on Wednesday said that it has entered into a pact to divest its entire stake in L&T Metro Rail (Hyderabad) Ltd to Hyderabad Metro Rail Ltd for Rs 1,461.47 crore. The development marks the company's exit from the urban metro rail project. L&T said in an exchange filing that it has ''executed a share purchase agreement with Hyderabad Metro Rail Limited, a Government of Telangana Enterprise, for disposal of its entire shareholding in L&T Metro Rail (Hyderabad) Ltd, a subsidiary of the company, for a consideration of Rs 1,461.47 crore.'' Upon the transaction likely to be completed by the end of June, L&T Metro Rail (Hyderabad) Ltd (LTMRHL) would cease to be a subsidiary of the company, the filing said. ''Upon closing of the transaction, Hyderabad Metro Rail Limited proposes to refinance the existing debt of LTMRHL. Consequently, the Corporate Guarantee and Letter of Comfort issued by the Company in respect of such debt shall be released,'' the filing said. Larsen and Toubro had earlier expressed its desire to offload its stake, over 90 per cent, in the L&T Hyderabad Metro Rail project to either the state or central government through a new special purpose vehicle, citing operational and accumulated losses. In a letter addressed to the Ministry of Housing and Urban Affairs (MoHUA), L&T Metro Rail said the Telangana government, despite repeated follow-ups, had not provided the expected financial assistance, and the delay was further aggravating the financial duress of the concessionaire and making the situation necessarily difficult to manage. The company had said it faced several structural, financial and regulatory challenges resulting in substantial cost and time overrun due to delays on account of various reasons beyond the control of the concessionaire, viz., property acquisition, right of way, changes in alignment, utility shifting, etc.