| Maytas Infra sells stakes in 2 expressway projects | |
| Arun Kumar / New Delhi July 20, 2009, 0:28 IST | |
In a bid to tide over its financial crisis, Maytas Infrastructure, the listed company promoted by Satyam Computers’ B Ramalinga Raju, has decided to sell part of its shareholding in Cyberabad Expressway Pvt Ltd and Hyderabad Expressway Pvt Ltd to Terra Projects Ltd, a company owned by the Kolkata-based Neco group.
Maytas, which owns 50 per cent in each of these two companies that will operate on a Build, Operate, Transfer (BOT) basis, is initially selling 36 per cent to Terra Projects. It is required to retain at least 14 per cent in these companies during the construction period, according to the terms of the concession agreement with the Andhra Pradesh government.
Once construction is complete, Maytas will reduce shareholding in these two companies to 6 per cent, which is permitted under the concession agreement, sources said.
The remaining 50 per cent in these two companies is owned by Gayatri Projects Ltd, a Hyderabad-based infrastructure player.
Sources said the decision to divest stake in these projects was taken by the four government -nominee directors on Maytas Infra’s six-member board. They were appointed after a failed attempt by Ramalinga Raju to merge the company with Satyam Computers, following strong shareholder protest in December 2008. This failure finally led to Raju’s confession to fraud in January 2009, following which he was jailed and Satyam sold to Tech Mahindra.
Since more than 95 per cent of these projects are complete, the company decided to sell shares to generate liquidity. Though the value of the transaction is not known, sources said the combined value would be less than Rs 200 crore.
Asked about the deal, Anil Agarwal, a government-nominated director, confirmed that the company was "bringing in a new partner in these two projects” but declined to discuss the size of the transaction.
The company has sought approval for the deal from various term lending institutions that have given collectively lent Rs 667.21 crore to these projects, sources said.
| THE FUNDING PATTERN |
| (In Rs crore) |
Project
size |
Equity |
Debt |
Govt.
grant |
| Cyberabad Expressway |
501.75 |
44.73 |
376.31 |
80.71 |
| Hyderabad Expressway |
430.96 |
68.20 |
290.9 |
71.86 |
In addition, banks have agreed to extend a credit facility of Rs 600 crore to Maytas Infrastructure. This includes Rs 200 crore as a loan and Rs 400 crore as non-fund based credit, which effectively means a bank guarantee for new projects for which the company will bid.
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