Saudi group to buy 20% in Maytas Infra

Saudi Binladin Group is all set to buy a 20 per cent stake in Maytas Infra, the infrastructure company in which IL&FS replaced the Raju family of Satyam as promoter.

Maytas Infra will allot 15.45 million equity shares to SBG Projects Investments, a member of Saudi Binladin Group, on a preferential basis. A proposal to this effect was approved by the company's board at Mumbai on Saturday.

Following this, SBG, which has its principal office at Port Louis, Mauritius, will become a co-promoter of the company.

The investor and promoters will undertake the mandatory open offer in accordance with market regulations, Maytas Infra stated in a press release. The cost of the acquisition is not known.

The Hyderabad-based company has been on a rollercoaster for over a year and a half.

In December 2008, the board of Satyam, then run by Ramalinga Raju, had approved the acquisition of Maytas Infra and Maytas Properties, a company owned by the Rajus. But the decision was rolled back after huge public outrage.

At that time, Maytas Infra had an order book of Rs 12,000 crore, apart from the Rs 12,132-crore Hyderabad Metro Rail project. After the Satyam scam broke out, Maytas lost projects worth Rs 3,800 crore as well as the Metro project. Bank guarantees worth Rs 495 crore were invoked and vendors stopped supplies. Subsequently, it also exited Rs 1,650 crore Machilipatnam Port development project.

Following the crisis, the company did not get any incremental credit and its net worth declined to Rs 163.19 crore as of March 31, 2009 as compared to Rs 652.84 crore a year ago. In September 2009, IL & FS replaced the Raju family to become the new promoter of Maytas Infra by buying a 37 per cent stake in the company.

IL&FS Chairman Ravi Parthasarathy, who now chairs the Maytas Infra board too, had said that IL&FS has a long-term interest in Maytas and resource-crunch was the biggest challenge for the company, and consequently efforts would be made to improve the liquidity. He had hinted at capital infusion by international investors.