L&T shipbuilding arm to raise 2,500 crore to replace loans raised for Tamil Nadu unit: Sources

MUMBAI: Larsen & Toubro's shipbuilding arm plans to raise 2,500 crore through bonds to replace existing loans raised for its unit at Kattupalli in Tamil Nadu, sources in the know of the matter told ET.

L&T, which has an established shipbuilding facility at Hazira in Gujarat, has set up an ambitious shipyard-cum-port at Kattupalli at a total cost of 4,700 crore, which has been financed through 80% debt and 20% equity.

The refinance may help the company reduce the interest rate by 150-200 basis points, analysts said. L&T Shipbuilding will raise the funds in two tranches of 1,200 crore and 1,300 crore, respectively.

It will raise 1,200 crore through 5-year bonds, which would have a call option after the third and fourth years at 8.95%.