Larsen & Toubro announced it would restructure its capital to reflect the true value of its remaining engineering and construction business after the cement business was spun off.

The subscribed and paid-up equity base of L&T will be reduced by Rs 223.86 crore (Rs 2.24 billion) to Rs 24.87 crore (Rs 248.7 million). As a result, the face value of the Rs 10 share will be reduced to Rs 2.

The demerged cement business will have an equity base exactly half the original equity base of the parent company, and with a face value of Rs 10.

The engineering and construction major is awaiting the approval of the Bombay high court for the changes in its equity structure.

Since the equity base of the cement company will be reduced to half the original size, the price per share will effectively double.

Grasim will therefore pay at a rate of Rs 342.60 per share, though its outgo will remain the same for half the number of shares, which will still get Grasim its 8.5 per cent stake.

"Initially most of the capital was raised to fund the cement business. The reorganisation of the capital consequent to the demerger of the cement business was necessitated to reflect the true value of the share capital of the two diverse businesses from the historical perspective," L&T executives said.

The company will soon seek shareholder approval for the disposal of its glass unit situated at Nashik.

The company has, however, been scouting for a buyer for over two years now. The move is in line with the recommendations of the Boston Consultancy Group, which suggested that L&T focus on core operations and exit non-core ones.

According to the company, it has shortlisted two buyers, which are conducting a due diligence process at the glass manufacturing unit.

L&T also said an extraordinary general meeting would be held on February 3 as per the directions of the Bombay high court, for considering and approving the scheme of arrangement between the company and UltraTech CemCo and their respective shareholders, creditors and Grasim Industries as a shareholder of the company and L&T Employees Welfare Foundation.