Punj Lloyd seeks equipment division spin-off

Luv Chhabra, Punj Lloyd's director for corporate affairs, told Dow Jones Newswires the move had been approved by the group's board and was being undertaken to reduce capital expenditure and improve revenues.

"It will be like an equipment rental company," said Mr Chhabra, "Punj Lloyd should be about 25% of its business and the rest third-party...Logically, one option is to dilute [our] stake in this entity so that be don't have to keep investing in it again and again."

The company's equipment fleet is valued at $250 million and is managed from three main equipment sites in India, Indonesia and Abu Dhabi.

Punj Lloyd has annual revenues of US$1.97 billion and is active in oil and gas, infrastructure construction, process engineering and nuclear power. Its subsidiaries include Singapore based contractor Sembawang Engineers & Constructors and chemical company Simon Carves.

The group is most active in Asia Pacific, South Asia and the Middle East, and its revenues are dominated by infrastructure and pipeline projects, which together account for 55% of sales. Process engineering represents a further 36% of its business.