Engineering major Larsen & Toubro has inked a pact to sell out a minority stake in its infrastructure development arm IDPL for Rs 1,000 crore to a unit of Canada Pension Plan Investment Board or CPPIB. According to the agreement, the CPP Investment Board Singaporean Holdings 1 (CPPIBSH) will put in another Rs 1,000 crore or more after one year of the investment, according to a recent report in financial daily The Economic Times. This transaction represents CPPIB’s first investment in India’s infrastructure sector with a highly reputable partner and fits well with the company’s strategy for India as a key long-term growth market, said a senior CPPIB official. “We look forward to partnering with L&T and L&T IDPL’s experienced management teams as we build our infrastructure platform in India over the long term,” he added. The Canadian fund is buying preference shares of L&T IDPL, compulsorily convertible into equity shares by 2018 at a valuation to be determined as per a mutually agreed process. After conversion, CPPIBSH will hold a minority stake in L&T IDPL. With its long-term view, CPPIB would be an ideal partner for L&T and would provide growth capital to L&T IDPL to expand its infrastructure development business, according to a L&T official, who requested anonymity. L&T said the completion of the transaction and receipt of funds is subject to fulfilment of customary closing conditions for transactions of this nature and procuring necessary approvals from relevant government authorities and regulators. The stake sale is a part of the Indian engineering company’s strategy to deleverage its investment in projects that it is developing under the public-private partnership model. The company is also in the process of getting a trust, backed by its road projects, listed in Singapore.