Leighton takes in Indian partners for its South Asian operations
Construction giant Leighton Holdings Ltd found a viable ally for its Indian business interests on Welspun Corp Ltd, which recently acquired a 35 percent stake on the Australian contractor's operations in the subcontinent for roughly $103 million.
In a statement released on Wednesday, Leighton's incoming chief executive David Stewart said that the deal with Welspun would adequately serve the construction firm's goal of establishing a partner, in line with its purported rising activity in the subcontinent's accelerating economic growth.
Stewart expressed confidence that Welspun would prove to be a valuable partner as he cited its complementary portfolio of businesses which include considerable interests in infrastructures, the oil and gas industries, steel, steel pipes and home textiles.
Leighton also noted that the Indian conglomerate has been operating in the South Asian theatre since 1985 and maintains too a significant global operation in more than 50 countries, reaching an annual revenue of $1.585 billion in fiscal 2010.
Stewart said that the partnership would give Leighton Holdings greater access to the market as he added that the initial transaction alone would deliver some $US80 million in cash for the company and an additional one-off gain of up to $US200 million.
Also, Leighton Holdings revealed that another Indian construction firm, Oriental Structural Engineers Ltd, had acquired a total of 49 percent interests on Leighton International's two toll road operations for an estimated $39.6 million.
The twin sales, according to Stewart, "represent an exciting new phase in the development of our already successful Indian business and we look forward to working with Welspun," as he added that deals effectively brought "a very complementary strategic partner to Leighton International and are optimistic about pursuing many new opportunities together."