IL&FS to restore confidence in Maytas Infra

IL&FS, the new promoter of Maytas Infra Limited, is optimistic of taking the company to the next level by infusing liquidity and restoring confidence among the lenders to get incremental loans for completion of ongoing projects.

Among others, it will work to get the company out of the “collateral damage” it suffered by virtue of being a company promoted by the family of Satyam Computer Services Limited founder B Ramalinga Raju.

“We want to take Maytas Infra to the next level. Projects are not an issue. The biggest challenge is the resource crunch. We will encourage Maytas to bid with us for large projects,” IL&FS Chairman Ravi Parthasarathy said after attending the board meeting of Maytas as a special invitee here on Tuesday. He said that IL&FS will initiate the open offer for acquisition of an additional 20 per cent stake in Maytas within 21 days and the process will be completed in three months.

According to Parthasarathy, IL&FS and Maytas share a lot of synergy. With projects worth Rs 15,000 crore in execution, setting up of power plants with a cumulative capacity of 6,000 Mw and building three ports, IL&FS has the required experience to handle Maytas Infra and its projects.

“Right now, I am planning my entry. There is no inclination to exit,” he said, indicating that IL&FS has long-term interest in Maytas.

The new owner has not thought about changing the name of Maytas Infra. Parthasarathy said he would chair the Maytas Infra board and three other IL&FS officials — Hari Shankar, Arun K Saha and Karunakarana Ramachand — would be inducted as new directors.

There are now four government-appointed directors, including company chairman K Ramalingam. Anil K Agarwal, O P Vaish and Ved Jain are the three others. Two of the four government-appointed directors would be withdrawn.

Parthasarathy was hopeful that Maytas would achieve financial stability in about a year. Though the company reported a loss of nearly Rs 500 crore in the financial year 2008-09, it made a cash profit of Rs 2.5 crore during the first quarter.

“This is an indication that bad times are ending. The profit might be small but it tells that the company is in the right direction,” he said.

IL&FS will not ask for any relaxations in terms of bidding rules for Maytas Infra. The company did not get any incremental credit in the last eight months or so. This was making things difficult for Maytas. The effort would be to increase the liquidity position for the company and restore the credibility of stakeholders.

The company would pursue the corporate debt restructuring package (CDR) package, which was now mired in procedural delays.