Maytas on course to tie up funds for Hyderabad Metro

Maytas Infra-led consortium is well on course to achieve financial closure for the Rs 12,000-crore Hyderabad Metro Rail (HMR) project by March 2009, according to HMR Corporation Managing Director NVS Reddy.

Doubts were raised over the financial capability of the company to execute the 71-km rail project following last week’s aborted attempt by Satyam Computer Services to acquire Maytas Infra and Maytas Properties, both promoted by the family members of Satyam founder and Chairman B Ramalinga Raju, for $1.6 billion.

Dispelling the doubts, Reddy said the HMR board reviewed the build, operate and transfer (BOT) project on December 15 and it was satisfied with the progress. “A lot of work is going on,” he told Business Standard.

The review of the project, however, was unconnected with the latest development as it was done a day before Satyam announced its intention to acquire the infrastructure firm and later retracted its decision due to investor outrage.

Reddy said Maytas had informed that its consortium partner IL&FS was negotiating with different banks and 60 per cent of the loan component had already been tied up. The Maytas-led consortium comprises Nava Bharat Ventures Ltd, Italian-Thai Development Plc and IL&FS.

Reddy said the consortium had engaged 100 consultants to undertake the design work of the project. It had also given a Rs 60-crore bank guarantee as a security deposit. Tenders have been floated for civil structures, rolling stock, signalling, telecom, electrical and mechanical equipment.

While bidding for the HMR project, Maytas had decided not only to forego a grant of nearly Rs 5,000 crore from the Centre and the state but also offered to pay Rs 30,311 crore over the concession period of 35 years to emerge as the successful bidder among the five shortlisted players. The project is scheduled to be completed by 2013.

Maytas Infra Chief Financial Officer VVR Raju had earlier said that funding for the company’s ongoing projects was not an issue. Stating that Maytas was undeterred by Satyam’s decision to call off the acquisition plans, Raju said: “There won’t be any positive impact if the deal is through and any negative implications if it isn’t.”

However, the share prices of Maytas Infra tanked after the Satyam episode. The company’s share price declined 9.98 per cent to Rs 181.25 on the BSE on Wednesday, compared with the previous day’s close of Rs 201.35. Maytas Infra, a 23-year-old company, went public in October 2007. Teja Raju, son of Ramalinga Raju, is the vice-chairman.