Lenders want Maytas Infra recast

Hyderabad March 20, 2009
Reconstituted board meets, to talk to lenders.

The lenders of Maytas Infra Ltd, promoted by the family of Ramalinga Raju, the disgraced founder of Satyam Computer Services, have sought restructuring of the firm.

The newly appointed (by the government) board members, OP Vaish and Ved Jain, said the company and its lenders were expected to reach an agreement in this regard by March 25.

The board met here under the chairmanship of Vaish and sought information on the state of the company and the various projects it was implementing and negotiating. The company’s Vice-Chairman, B Teja Raju, and Additional Director B Narasimha Rao, were present. The board will reconvene next week.

Meanwhile, the two new board members said they would hold an informal meeting with all stakeholders, including lenders.

The board of Maytas Properties, a sister company, had met yesterday. The meeting was also chaired by Jain. He said the company had called for a meeting on March 25 of all those who had booked flats or houses with the company.

In the Maytas Infra meeting, a presentation was made to the board, which wanted more information in three days. The effort is to protect the interests of all stakeholders. The board is supposed to have begun planning for this.

On if the company was looking for a suitor like Satyam, Vaish said the case of Maytas Infra was different from Satyam and there appeared no need for a suitor. The company has not fixed a timeframe to declare the third-quarter results. The board, however, asked it to do so as soon as possible. Asserting that the company had a large order book, he said the board was not in a position to comment on the individual projects being implemented.

“There is no man-biting-dog situation yet,” Vaish said in reply to a query if the board had found anything unusual with the fund flow and if the company was financially sound enough to go on with various projects. “We are not giving a certificate to Maytas. We do not know now if there is diversion of funds from Satyam to Maytas. We do not have any information on that,” he said.

Post January 7 (when Raju confessed to fraud), the credibility of the company had taken a beating and that resulted in delays in execution, Jain said. The company was, however, confident of continuing the business, he added.

The duo did not comment on whether the company had deposited the Rs 240 crore performance guarantee while seeking the extension of the deadline for financial closure for the Hyderabad Metro Rail project.

“The company is interested in executing the project,” Jain said, adding that the board would also meet other members of the consortium that had won the high-profile project

The company had 1,800 employees, Vaish said, adding that nobody had been asked to leave.