Maytas Properties submits proposals for restructuring its debt

The proposals include a funded interest term loan and an extended period to repay the loan
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First Published: Tue, Feb 12 2013. 09 21 PM IST
IL&FS so far has pumped in `250-275 crore for completion of the Hill County project that comprises 840 flats and 326 villas. Photo: Mint
IL&FS so far has pumped in Rs.250-275 crore for completion of the Hill County project that comprises 840 flats and 326 villas. Photo: Mint
Updated: Tue, Feb 12 2013. 11 52 PM IST
Hyderabad: Maytas Properties Ltd, a Hyderabad-based real estate company promoted by the Infrastructure Leasing and Financial Services Ltd (IL&FS) group, has submitted proposals for restructuring its debt of Rs.250 crore.
SBI Capital Markets Ltd is the adviser for the debt restructuring, Maytas said on Tuesday.
State Bank of India, Axis Bank, State Bank of Mauritius and IDBI Bank were the lenders for the flagship 175-acre Maytas Hill County project in Hyderabad that the company was executing.
The proposals include a funded interest term loan (FITL) and an extended period to repay the loan, Maytas said.
Maytas Properties was founded by B. Ramalinga Raju, the founder of Satyam Computer Services Ltd who in January 2009 admitted to a multi-crore accounting fraud at the software services firm. Soon after, the erstwhile management of Maytas headed by Raju’s son B. Rama Raju stopped work on the Hill County project citing lack of funds.
The government intervened after complaints by around 800 customers who had bought flats and villas in the project, and handed over the reins of the company to IL&FS, which assured project completion and settlement of outstanding disputes with private equity investors, bankers and regulators.
Maytas Properties recently reached a settlement with private equity firms SRS Orion and JM Financial, under which it will pay them a total Rs.850 crore in four tranches, Mint reported on 30 January. SRS Orion and JM Financial together had invested around Rs.600 crore in Maytas during the period of the erstwhile management.
Maytas, meanwhile, is focusing its energies on completing its Hill County project, its most prominent project.
IL&FS so far has pumped in Rs.250-275 crore for completion of the Hill County project that comprises 840 flats and 326 villas. “After completing pending deliveries, we still are left with an inventory of 220 flats and 126 villas to monetize,” said P.V. Rao, chief operating officer of Maytas Properties.
Rao expects to generate Rs.200-300 crore in 12-18 months through sale of the inventory.
Maytas plans to invest another Rs.150 crore to develop an additional 12.5-acre land parcel in the Hill County project to build about 800,000 sq ft. of residential space. “After completion of 12.5-acre development, we will be able to significantly reduce our losses,” Rao said.
Maytas has another 75 acres adjoining the Hill County project, with an option to convert it into either a residential project or commercial office space, based on market demand.
Maytas has a 600-acre land bank, of which 575 acres are in Hyderabad and the rest in Visakhapatnam. “Our plan is to develop this land bank in a phased manner. Proceeds generated from development will be used to pay back investors and bankers,” Rao said.
“Though IL&FS is trying to revive the company, a customer who wants to put in Rs.50-60 lakh to buy a flat there will think twice given the company’s past and other legal issues,” said Sandip Patnaik, managing director, Hyderabad, at Jones Lang Lasalle India, a property consultancy.
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First Published: Tue, Feb 12 2013. 09 21 PM IST
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