Maytas Infra to rejig equity stakes in Hyderabad Metro

11 May 2009, ET Bureau

HYDERABAD: The board of Maytas Infra, the cashstrapped infrastructure firm, is reviewing the equity holding of three other stakeholders in the Rs.12,000 crore Hyderabad Metro Rail project, even as it has begun negotiations with banks to raise funds.

The firm is a lead partner in Maytas Metro Rail (MML), a special purpose vehicle floated to execute the project to improve connectivity in the city. Nav Bharat Ventures, Ital Thai and IL&FS and the state government are the other stake-holders .

“The equity holding of consortium partners will be decided only at the time of the financial closure as they will pick up stakes then. The initial shareholding plan is likely to be crystallized then,” said an official privy to the development . Going by the concessionaire agreement , Maytas Infra holds a 26% stake in the consortium. Nav Bharat Ventures has a 16% stake, while Ital Thai and IL&FS hold 5% each. The state government holds 11% and the balance 37% is with the consortium members. The board is in talks with the consortium members to review the shareholding pattern.

The timing of the review of stakes in MML is significant, as it comes close on the heels of an allegation made by a city-based NGO that the company has been promoted as another Raju family venture rather than a professional consortium.

MML started with a share capital of Rs 5 lakh with 50, 000 equity shares of Rs 10 each. In September last year, Maytas Infra was allotted 44,995 shares and B Teja Raju 5,000 shares. Nandini Raju, Ramalinga Raju’s wife, and three others had one share each. Three other consortium members did not hold any shares in MML. “Shares will be allotted to other stake holders after the financial closure” , said the official.

The project was to achieve financial closure in March this year, but missed the deadline . The firm has not yet deposited the Rs 240 crore performance guarantee for the project with Hyderabad Metro Rail limited (HMRL). The project is in a limbo as MML failed to mobilise resources after Ramalinga Raju confessed to the Rs 7,000 crore fraud at Satyam. It then sought a six-month extension and the proposal is noew pending with the government.

A government appointed board member to salvage the firm said that the financial closure would be achieved within the next two months. It is, however, not clear if banks will be willing to lend money for the controversial project. On Saturday, banks agreed to restructure the company’s outstanding dues in a corporate debt restructuring plan. Apart from a moratorium on the Rs 1,700 crore outstanding liabilities and paring the rate of interest, banks will also provide extra funds to get the projects going, Ved Jain, Member on Maytas Board and former President of Institute of Chartered Accountants said.

A clutch of banks including State Bank of India, IDBI, ICICI Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Citibank NA and HDFC Bank have reportedly lent to the firm. Besidesthe metro rail, Maytas infra has an order-book of Rs 8,000 crore.