Larsen and Toubro Ltd. is in converses with merge its thermal power business with the Indian unit of Singapore-based Sembcorp Industries Ltd., as indicated by individuals with information on the matter.

The share-swap deal will help India’s biggest engineering conglomerate pare debt, individuals said, asking not to be distinguished as the thoughts are private. The transaction could esteem the consolidated business at around $4.5 billion including debt, one individuals said.

L&T is thinking about moving as much as ₹10,000 crore ($1.3 billion) of debt to the merged entity, as per the individual. It might ultimately look for a different posting for the power business after the deal, the individual said.

Consultations are continuous, and subtleties of the potential transaction could change or talks could fall apart, individuals said.

An agent for L&T didn’t immediately respond to requests for comment, while a delegate for Sembcorp couldn’t quickly comment.