Maytas to raise fresh funds, not ruling out stake sale

May 5th, 2009 - 5:49 pm ICT by IANS  

Ramalinga Raju New Delhi, May 5 (IANS) The government-appointed board of Maytas Infra Ltd, an infrastructure firm linked to fraud-hit Satyam Computers, Tuesday said it was planning to raise funds through fresh loans and, if necessary, through a stake sale.
“The corporate debt restructuring, which we have initiated in consultation with our lenders will not only try to reschedule loans but also look at raising fresh loans for existing projects,” said Anil K. Agarwal, a government-appointed director of the firm.

The company, run by Satyam co-founder and chairman B. Ramalinga Raju’s son Teja Raju, has been mired in controversy after the Rs.78-billion Satyam scam came to the fore.

The government has rejigged the Maytas board and appointed four new directors - Agarwal, K. Ramalingam, O.P. Vaish and Ved Jain - after the Satyam scandal.

With orders being cancelled and clients withholding payments, the Hyderabad-based infrastructure firm has been pressed for funds to continue operations.

“Some orders have been cancelled. It’s because of the slowdown in the economy and the Satyam case. But we are talking to our clients and are expecting payments of Rs.500 crore soon,” said director Jain, who was also a former president of the Institute of Charted Accountants of India.

The company is in talks with all of its 17 lenders to help restructure its loan repayment schedule and has appointed SBI Capital as the consultant. The outstanding debt of the company stands at about Rs.1,700 crore.

Prominent among the lenders are ICICI Bank, which has lent about Rs.400 crore to the company. SBI has lent about Rs.200 crore.

However, the board seemed quite hopeful that the company would be back on track as it had quite a healthy order book and the necessary expertise to execute such orders.

“The company can be revived. It has an order book of about Rs.8,500 crore other than the pending Hyderabad metro project worth Rs.15,000 crore,” said Maytas chairman and director Ramalingam.

The board also said the company might sell stake to get out of the current cash crunch.

“We are not ruling out a stake sale,” said Jain.

The promoters hold about 85 percent in Mayatas Infra.

Mayats, which has about 1,800 employees on its rolls, is being investigated by the Serious Fraud Investigation Office - the investigative arm of the ministry of company affairs to examine whether funds were diverted from Satyam to the infrastructure company.

“The accounts of the company will be restated after we get all reports from the investigating agencies,” said Jain.

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