Maytas OKs draft debt recast plan

Maytas Infra Ltd,sister concern of the fraud-tainted promoters of Satyam Computer Services Ltd,is in talks with its bankers to recast Rs 1,700-crore....

Maytas Infra Ltd,sister concern of the fraud-tainted promoters of Satyam Computer Services Ltd,is in talks with its bankers to recast Rs 1,700-crore worth borrowings as part of a corporate debt restructuring CDR plan,the draft of which has recently been approved by the companys government-appointed board. The CDR may include a part-sale of equity by Rajus,who continue to hold 85 per cent,company officials said.

Maytas,whose order book has shrunk almost 30 per cent to Rs 8,500 crore in the last seven months,was forced to evaluate the CDR given its difficult cash position. We are facing financial difficulty. Cash in hand may be there,but there is liability also, said Ved Jain,a board member and past President of the Institute of Chartered Accountants of India.

Maytas stock climbed Rs 2 to close at Rs 41.05 on news of the CDR. The share price had plunged to Rs 39 from Rs 160.50 in January before the Satyam accounting fraud became public. Jain said customers owe the company about Rs 500 crore. We are talking with customers and both the finance and legal committees of the company are following up with them, Jain said.

The company,which is executing the Rs 15,000 crore Hyderabad Metro project has also asked the Andhra Pradesh government for additional time to achieve financial closure for the project due on March 18,2009.

There are some problems with land acquisition which have caused the delay. We are talking to the state for an extension, K Ramalingam,Chairman of Maytas board said in a press conference today.

Of the Rs 8,500 crore order book,irrigation projects in Andhra Pradesh account for Rs 5,000 crore and the balance includes roads,ports and power projects.

Investors may have to wait a while before the company presents its annual financial results for FY09 as the investigations are still on. The Serious Frauds Investigation Office is studying the case and Maytas is co-operating fully. Till they complete investigations,it is not possible for the board to come up with the figures, Jain said.

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Apart from the promoters including Ramalinga Rajus son Teja Raju,the government had appointed four members to Maytas board to prevent the company,which has over 2,000 employees,from sinking. The four members have been vested with all financial executive powers as per the order of the Company Law Board CLB.

He Teja Raju is co-operating well with the new board and is quite receptive. He is taking our decisions in good stride even as the new board has been vested with all powers regarding fund flow,cash flow and projects, Anil K Agarwal,another government nominee on the board and ex-Assocham president said.