Maytas Infra revival plans on track; plans to restructure debts

Maytas Infra revival plans on track; plans to restructure debts

New Delhi: The future of Maytas Infra Ltd, promoted by the family of Satyam Computer Services Ltd founder B. Ramalinga Raju, looked more certain on Tuesday with one of its senior executives saying the company is in talks with SBI Capital Markets Ltd (SBI Caps) to fine-tune a corporate debt restructuring or CDR package that its board had approved last month.

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SBI Caps will talk to the company’s 17 lenders, led by State Bank of India and ICICI Bank Ltd, said Anil K. Agarwal, one of the government-appointed directors on the company’s board. Declining to reveal further details of the restructuring plan, K. Ramalingam, chairman of the new board, said the immediate concern was to get the company’s current projects going. Ramalingam is one of four government-appointed members to the company’s board. The others are Agarwal, Ved Jain, former president of the Institute of Chartered Accountants of India, and O.P. Vaish of law firm Vaish Associates.

“We got the communication yesterday. We have to handhold the company through the CDR process," said an SBI Caps executive, who did not wish to be identified.

The official said that once the CDR proposal is finalized, it will be put before a committee of lenders for approval. It then has to be sold to individual lenders. The SBI Caps executive said that while there was no time limit for the completion of the process, it is typically wrapped up in two months.

While not ruling out the possibility of a strategic stake sale, the directors said that some equity would be infused into the company as part of the debt restructuring package.

Hyderabad-based Maytas, which has interests in highways, airports and a Rs15,000 crore Metro rail project in Hyderabad, has lost around 75% of its market value since January, when Raju admitted to fudging Satyam’s books to the tune of at least Rs7,136 crore. Maytas shares were trading at Rs41 at the Bombay stock Exchange at close of trading on Tuesday.

The company has Rs1,700 crore of debt on its books and an order book of Rs8,500 crore, apart from the Rs15,000 crore Hyderabad Metro project.

“At present, our focus is the revival plan. What it (Maytas Infra) needed was credibility," Ramalingam said.

“We have spoken to the major lenders. We are in the process of recovering monies from customers. We are also monitoring the cash flow and fund flow situation," said Jain, who added that the company had receivables, or money owed to it by customers, of around Rs500 crore.

Ramalingam also said the company had requested an extension in the financial closure deadline for the Hyderabad Metro project.

The original deadline to tie up funds for the project was 18 March. Other projects being executed by the company are also likely to be hit by delays, Ramalingam said.

“I see no light at the end of the tunnel," said Ganeshram Jayaraman, an analyst with Spark Capital Advisors. “In this business, if you can’t raise capital, no bank will give you funds, no vendor will give you advances. Existing project execution itself is taking time."