Mumbai: Larsen & Toubro's board has given approval for the scheme of amalgamation of L&T Shipbuilding with the parent group. The scheme is in the interest of both, their respective shareholders and creditors, L&T said.
"The proposed merger hence can facilitate utilisation of the shipyard facility in an optimum manner by leveraging superior pre-qualification and financial capability of L&T Limited and by also achieving better execution through a pooling of human capital with diverse skills, talent, and vast experience."
L&T said there has been confusion among customers in understanding the legal status of L&T and L&T Shipbuilding during prequalification and while awarding contracts. The competition has also been leveraging L&T Shipbuilding financials for negative propaganda, despite L&T's strong balance sheet.
"The proposed merger provides an opportunity to optimise the utilisation of L&T Shipbuilding's facilities (including Kattupalli Shipyard) for businesses other than those presently carried on," L&T said in a statement.
"The amalgamation will improve organisational capability arising from the pooling of human capital that has diverse skills, talent, and vast experience," it added.
"Also, the proposed amalgamation would be beneficial from a revenue generation and cost optimisation perspective as the transferee company would continue to reap the benefits of qualifications/certifications of the transferor company post-amalgamation."
