Maytas seeks more time for Metro Rail financial closure

March 17th, 2009 - 9:37 pm ICT by IANS  

Ramalinga Raju Hyderabad, March 17 (IANS) Maytas Infra Ltd, a company owned by the family of former Satyam Computers chairman B. Ramalinga Raju, Tuesday sought more time for achieving financial closure for Rs.122-billion (Rs.12,200 crore) Hyderabad Metro Rail project.
The infrastructure firm has requested the Andhra Pradesh government to grant it extension of time to achieve the milestones mentioned in the concession agreement, which include achievement of financial closure.

“The global recession and the consequent credit squeeze in national and international capital markets have created a force majeure situation. Besides, the ongoing PIL (public interest litigation) is having an extremely deleterious effect on our ability to achieve the financial closure,” the company told the government.

In the PIL filed in the court a non-governmental organisation has challenged the selection of Maytas-led consortium for the project.

“We are also affected by the global recession, and raising of debt (including external commercial borrowings) is proving to be a challenge in this market,” said a company spokesman.

The financial closure for the project is to be achieved this month as per the concession agreement signed in September last year.

Maytas came under cloud after Ramalinga Raju in January this year admitted Rs.78-billion (Rs.7800-crore) fraud in Satyam. There are allegations that he diverted the money to Maytas owned by his son B. Teja Raju, but Maytas has denied it.

Despite demands from various quarters for scrapping Metro Rail and other projects awarded to Maytas, the Andhra Pradesh government has refused to do it without sufficient grounds.

The government had hinted that it might cancel the Metro Rail project if the consortium failed to achieve financial closure.

The Maytas-led consortium holds 52 percent and the state government 16 percent equity in the project. Within the consortium, Maytas holds 26 percent, Navabharat 16 percent, Ital Thai (Thailand) 5 percent and IL&FS 5 percent.

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