20549 - Larsen & Toubro

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Summary of Proposed Investment

Project Number

20549

Company Name

LARSEN AND TOUBRO LIMITED

Date SPI Disclosed

Apr 15, 2003

Country

India

Industry

Tourism, Retail and Property

Projected Board Date

May 30, 2003

Status

Completed

Sector

Construction and Real Estate

Department

Regional Industry - MAS Asia & Pac

Environmental Category

B - Limited

Previous Events

Approved : Jun 5, 2003
Signed : Jun 17, 2003
Invested : Jul 15, 2003

Project Description

Larsen & Toubro (L&T, or the company) is one of the largest engineering conglomerates in India. Its main line of business is engineering, procurement and construction (EPC) for large industrial, utilities and infrastructure projects, manufacturing of cement, and manufacturing of electrical and electronics equipment. The company is currently undertaking an operational and financial restructuring for which it has requested IFC’s support. The restructuring involves refinancing of the existing loans as well as the refurbishment and modernization program that would enable the company’s increased focus on exports of its products and services.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

Development Impact

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Project, because a limited number of specific environmental and/or social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Location of environmental documents in locally affected community
The environmental documents will be available at the company’s headquarters: L&T House, N.M.Marg, Ballard Estate, Mumbai – 400 001, India Phone: 91 22 2261 8181 Fax: 91 22 2268 5871 They will also be available at the company’s area offices in Chandigarh, New Delhi, Lucknow, Kolkata, Ahmedabad, Vadodara, Pune, Hyderabad, Bangalore and Chennai.

The proposed IFC investment is expected to help L&T to focus on those areas of business where it is most competitive resulting in its further expansion into export markets. The proposed investment will also support: - regional economic activities due to the L&T’s large involvement in infrastructure, utilities and industrial projects; - creation of additional jobs in related manufacturing and service sectors. IFC’s role involves: - provision of long term financing in foreign currency at market rates; - support L&T’s restructuring that would result in its increased international competitiveness; - advising on local partners and possible investors for L&T’s export projects as well as provision of possible financing for these projects; and - ensuring that its environmental and social practices comply with the World Bank Group’s standards.

Contacts

For Inquiries About the Project, Contact

To contact the project company or to get contact information for the area offices, please write to: Mr. B. Ramakrishnan, General Manager (Finance). Phone: 91 22 2261 8181. Fax: 91 22 2268 5871.

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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