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L&T board to discuss further on cement unit

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(NO) BIRTHDAY GIFT: Mr Kumar Mangalam Birla, Chairman of the AV Birla group, spent the afternoon of his birthday on Saturday at the board meeting of Larsen & Toubro. Mr A.M. Naik, Managing Director, L&T, was asked whether his cement division might not make a good birthday gift for Mr Birla. "No, no. That would be too big a birthday gift'', he replied.

MUMBAI, June 14

YET another board meeting of Larsen & Toubro — called to discuss the issue of the restructuring of its cement division — ended inconclusively today.

ICRA which had earlier been assigned to analyse the two different proposals - from CDC Captial Partners and from Grasim Industries - for the cement division, may be asked to make more amendments to its report, based on clarifications asked for in today's meeting, the L&T Managing Director, Mr A.M. Naik, said, addressing newspersons after the board meeting.

The ICRA report which was formally circulated to the board members only a couple of days ago, analyses the two proposals — one from private equity fund CDC Captial Partners, and the other from Grasim Industries. The first calls for the subsidiarisation of the cement division while the second calls for the vertical demerger of the division from L&T. On May 23 this year, when the board last met over the same issue, ICRA had made a presentation on the basis and criteria it had employed for its analysis of the two proposals. Today's board meeting actually discussed the report; the discussions would continue into the next board meeting, which has not been scheduled, said Mr J.P. Nayak, board member and President Operations, of L&T's cement division.

"The issue is very complicated," said Managing Director Mr Naik. "We have always been saying that whatever happens - even a vertical demerger - the company's balance sheet, its net worth and other interests have to be protected. And that is what has come up again."

"To accept any one of the proposals would mean a change in the very character of the company," said Mr Nayak, responding to a question on the prolonged dragged on of the issue. The issue is very complicated and deserves further analysis, he added. "Whatever we do would be in the best interest of the shareholders."

The Chairman of Grasim Industries, Mr Kumar Mangalam Birla, said it would be too premature for him to make any comment on the issue.

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