Tuesday, December 18, 2007

L&T, IDFC, Lehman buy 7% in B Seenaiah

Engineering and construction giant Larsen & Toubro (L&T), Infrastructure Development and Finance Company (IDFC), Lehman Brothers and Singapore-based private equity (PE) firm Amansa Capital together have picked up a 7% stake in Hyderabad-based construction firm B Seenaiah & Company Projects (BSCPL) for Rs 152 crore.

Bollineni Seenaiah seems to have trebled its valuation since its last stake sale 18-20 months ago when it sold around 19% stake to two foreign investors, New Vernon Private Equity Fund and Tiger Veda for Rs 150 crore. Sources said L&T has routed its investment through two of its group companies, L&T Infrastructure Finance and L&T Capital. This is the second round of PE funding in BSCPL.

BSCPL is one of the leading construction firms in road and irrigation projects in India. BSCPL, which has a significant overseas presence, has already completed seven road projects in Afghanistan. IDFC SSKI acted as exclusive financial advisor to BSCPL for the deal. IDFC was also the company’s advisor during its first round of PE funding.

An investment banker close to the deal said the company will use the investment to fund its projects in roads and real estate, and repay a portion of its existing debt. BSCPL chairman B Krishnaiah said the company had drawn up ambitious plans to grow at a rapid pace in the infrastructure segment.

“We see a lot of synergy between the company and all the investors who have come on board. This will lead to greater thrust in achieving goals set out,” he said.

BSCPL has already formed a consortium with Siemens to bid for modernisation of airports in India. The company has also forayed into other infrastructure sectors like development of ports and power plants and urban infrastructure. Currently, the company has orders worth Rs 2,224 crore.

“The technical competence and the ground-level operational efficiency built up over the years will now be leveraged in different areas of infrastructure development. The presence of the diverse set of investors who are giants in their respective areas will provide a boost to the company’s plans,” said BSCPL managing director Bollineni Seenaiah.
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