Leighton buys out India joint venture
By Helen Wright02 January 2014
Australian contractor Leighton has acquired Welspun’s 39.9% stake in its Indian joint venture, Leighton Welspun, for US$ 99 million. The deal gives Leighton 100% ownership of the business.
Welspun sold the stake as part of a strategy to reposition its infrastructure business and focus on its core activities. Leighton said it would rename the business Leighton India, adding that it would continue to report through Leighton Asia, India & Offshore (LAIO) under LAIO managing director Ian Edwards.
The joint venture was established in 2010, aiming to capitalise on opportunities in the Indian infrastructure sector – especially public-private partnerships.
Leighton said it continued to see strong long-term prospects in the Indian market, but added that it would review the operations of Leighton India and consider integrating several business units. It said this would be both to lower costs and provide greater business opportunities.
Leighton also said that the transaction would drag its net profit for 2013 down by approximately AU$ 70 million (US$ 62 million) due to foreign currency translations and accountancy re-classifications.
The contractor added that its 2013 underlying net profit after tax would not be impacted by the transaction, which is scheduled for completion in the first quarter of 2014.