Larsen plans to buy overseas coal mines

NEW DELHI: Larsen & Toubro Ltd, India's biggest engineering company, may borrow as much as $4.4 billion to build a power-generation business and is considering buying coal mines in Australia and Indonesia to gain fuel supplies.

Larsen's utility unit may use debt to finance 80 percent of the 250 billion rupees ($5.5 billion) needed to build 5,000- mW of thermal power capacity, Ravi Uppal, managing director and chief executive Officer of L&T Power, said in a telephone interview from Mumbai on Jan 15, without giving details of the funding plan.

Increased debt may prompt a cut in Larsen's credit ratings after Moody's Investors Service lowered its outlook on the Baa2 ranking to negative in August on concern about increased borrowings. The government is encouraging companies to invest as much as 569.6 billion rupees in power generation to end shortages in the world's second-fastest growing major economy.