Larsen & Toubro (L&T), India’s leading engineering, technology, construction and financial services conglomerate recently announced the closure of the strategic divestment of its Electrical & Automation (L&T E&A) business to Schneider Electric, a global player in energy management and automation for Rs 14,000 crore.

The divestment is in line with L&T’s stated goal of unlocking value for future growth. In an interview with IANS, S.N. Subrahmanyan, CEO & MD, Larsen & Toubro talked about the transaction. He said the sale proceeds will be utilized partly for de-levering the consolidated debt levels in L&T’s balance sheet and also to strengthen the liquidity buffer warranted by the current economic environment.

“We are in the middle of an unprecedented pandemic which has caused considerable uncertainty to business during the past 5 months. In such times, it is necessary to strengthen the balance sheet and stay adequately liquid”, he added. On distribution to shareholders, L&T CEO & MD said that once clarity emerges about the duration and the impact of the pandemic, assessment of surplus cash and its potential distribution to shareholders will be made.