L&T to sell its 11.5% stake in UltraTech

Larsen & Toubro (L&T) will sell its 11.5% stake in the Aditya Birla group company UltraTech Cement by December. Pegged at around Rs 800 crore at Friday's market price, the sale proceeds will prop up L&T's bottomline in 2009-10. The company will also realise a further Rs 100 crore of other income from the sale of its ready-mix concrete assets in 2009-10. It had sold that business to Lafarge in 2008 for Rs 1,480 crore, and around Rs 100 crore has been pending from this transaction. L&T chairman AM Naik that the Birla group enjoys the right of first refusal on its stake in UltraTech. "We can offer it to a third party if they (the Birla group) don't buy." Mr Naik added that the Birlas and L&T had not spoken on this issue. "It's not a complicated matter. We will sell the shares at the right price at the right time," he added. Industry observers feel that the Birla group would almost certainly buy L&T's shareholding. L&T would have to sell its stake by the year-end under the terms of an agreement with Grasim signed in 2003. The agreement had helped end an epic corporate battle, during which Grasim made an open offer for L&T. It ended with L&T selling its cement business to the Birlas.