Lenders may offer helping hand to Maytas Infra
Lenders to Maytas Infra may be more receptive to the loan restructuring package of the troubled company with the change in the management.
By ET Bureau |
MUMBAI: Lenders to Maytas Infra may be more receptive to the loan restructuring package of the troubled company with the change in the management. On Monday, Company Law Board announced that infrastructure company IL&FS will take over the management control of Maytas Infra, replacing Teja Raju.
Lenders have an exposure of close to Rs 2,000 crore in Maytas Infra, which includes both loan and guarantees. Key lenders include ICICI Bank, State Bank of India and IDBI Bank. IL&FS, which will end up increasing its present 14.5% stake to a 37%, has not extended any loan to the ailing company. Promoter Teja Raju had pledged shares with IL&FS in exchange for a loan. Since the company has failed to meet its margin calls, the loan was converted into equity.
According to sources, IL&FS had taken into confidence the lenders to the beleaguered company. ���By delinking it from the Raju family, IL&FS expects to rid the company of the negativity associated with its erstwhile promoters,��� an IL&FS source said.
Fresh capital investments are unlikely, but Maytas would require working capital funds. Over the past few months, Maytas Infra had been in talks with lenders for additional working capital loan of Rs 700 crore for running day-to-day business. Lenders had turned down the Rs 700-crore proposal, but reluctantly agreed to lend about Rs 300 crore, provided promoters infuse some money to revive the company.
���As things stand, the entire restructuring package will be revisited in context of new management,��� pointed out a senior bank officer, who has loan exposure in the company. ���Earlier, we could exert some pressure on the board of Maytas Infra to infuse capital in the company. But that may not be the case any longer. The new management will expect us to give additional funds without infusing fresh capital.
This means higher risk for lenders,��� he added. At the same time, bankers believe that IL&FS will bring professional management on the board, which will result in a faster turnaround. The company has reported a Rs 489-crore loss for fiscal year March 2009. Since IL&FS does not have any debt exposure in Maytas Infra, it will aim at turning around the company which will make it more attractive for possible suitors at some point of time in future. For this, they will immediately work on restructuring loans, stopping the exodus of clients and completing existing projects.
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Maytas Infra has been in trouble even since Ramalinga Raju disclosed that Satyam had fudged its accounts over the past few years. Although Maytas Infra was run by Teja Raju, elder son of Ramalinga Raju, many clients cancelled projects midway following the Satyam fiasco. Start a SIP with as low as ₹500 with ET Money App!
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