BackIL&FS may partner foreign firms to improve Maytas Infra position
IL&FS may partner foreign firms to improve Maytas Infra position
PremiumTowards unification: A highway project being built jointly by Maytas Infra and other firms in Bangalore. IL&FS would revive relationships with the partners of Maytas in various build-operate-t
Hyderabad: The new promoter of Maytas Infra Ltd, Infrastructure Leasing and Financial Services Ltd (IL&FS) plans to partner foreign firms to improve the financial position of the troubled company, a top executive said.
IL&FS would need at least two quarters to stabilize operations at Maytas and revive the firm before fresh capital infusion can be considered, chairman Ravi Parthasarathy told reporters on Tuesday.
“We have received interest in the past from several international investors to invest in Indian infrastructure projects as long-term players," Parthasarathy said. “We can approach them once we stabilize the operations of Maytas Infra in the next two-three quarters, where we can show improvement in margins and operations, hopefully by the end of the fiscal, with an improved balance sheet."
The Company Law Board (CLB), a quasi-judicial body for corporate oversight, on Monday ordered IL&FS to take over Maytas as its promoter. Maytas Infra, promoted by the family of B. Ramalinga Raju, the jailed founder of Satyam Computer Services Ltd, has been in trouble since he confessed to the country’s biggest accounting fraud at the software firm in January.
Parthasarathy said IL&FS would jointly bid with Maytas for construction contracts and various annuity projects. It would also revive relationships with the joint venture partners of Maytas in various build-operate-transfer projects.
While CLB has specified that IL&FS should continue as Maytas’ promoters for at least two years, Parthasarathy said he does not see any need for the company to exit Maytas on its successful revival.
IL&FS will have four of its representatives on the board of Maytas, including Parthasarathy, managing director Hari Sankaran, deputy managing director Arun K. Saha and chief executive of IL&FS Transportation Networks Ltd, Karunakaran Ramchand.
IL&FS will spend Rs130-150 crore to acquire 20% from public shareholders through an open offer, Parthasarathy said. It will make its open offer within 21 days and expects to complete the acquisition in the next three months.
IL&FS is set to increase its holding in Maytas to 37.1% from 14.5%. Raju’s family members hold 23%, which is locked in till October 2010, while financial institutions and the public hold some 40%.
Ved Jain, the government nominee on Maytas’ board, said the Raju family owned 100% in Maytas Infra before it went public in 2007 by diluting a 15% stake. Of the balance 85%, the promoters pledged some 62% with lenders including IL&FS, IFCI Ltd and Sicom Ltd.
Parthasarathy said IL&FS acquired only 14.5% of the promoter holding pledged with it and didn’t exercise its rights on another 22.6% stake pledged with it as it would have had to make an open offer under Indian law. “Moreover, we wanted to wait till all the stakeholders arrived at a consensus on IL&FS as the new promoter," he said.
Maytas shares rose 4.96% to end at Rs118.40 each on the Bombay Stock Exchange on Tuesday, while the exchange’s benchmark Sensex index lost 0.74% to close at 15,551.19 points.
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