Maytas Infra will get tech support from new promoter
June, 22nd 2010
The entry of the $5-billion construction conglomerate Saudi Binladin Group (SBG), as a co-promoter of the besieged infrastructure player Maytas Infra, could provide a fresh lease of life to the latter.
Maytas Infra, which is running short of orders, could see some action on the order book front as it would set up a subsidiary to access business opportunities in West Asia.
The company's stock shot up 20 per cent intra-day before settling down 3 per cent below the previous close.
With a contribution of Rs 300 crore, for a 20.8 per cent stake in Maytas Infra (through preferential allotment), SBG Projects Investments, the investment arm of SBG group, would not only be a investor, but would also bring with it technical expertise, given its vast experience in segments spanning roads, railways, tunnels and townships.
Maytas suffered serious setbacks after the promoter of its related company, Satyam Computer Services, was embroiled in a scam.
Among its bigger setback was the withdrawal of the Rs 12,000-crore Hyderabad Metrorail order awarded to the company.
After the change in management control, Maytas was retained as the contractor for certain projects such as small greenfield airports in Karnataka.
The orders tap nevertheless remained dry, until recently when it managed a Metro rail project in Gurgaon for Rs 185 crore. The SBG Group can now be expected to provide some support to the company to qualify in projects locally and abroad and also provide financial qualification.
While the money brought in by the new promoter would help in working capital requirements, Maytas may also receive some respite from debt restructuring.
The infrastructure player has announced that the Corporate Debt Restructuring Cell has approved the restructure proposal, which may result in the company's debt declining to Rs 800 crore from Rs 1,800 crore.
The company had a net worth of Rs 387 crore as of March 2009.
The allotment would also trigger an open offer that would be jointly made by the new acquirer and IL&FS. For every 100 shares held by the public, 41 would be accepted under the offer at a price of Rs 195.72, a discount of 7 per cent to the market price of Rs 211 on Friday.
The open offer would ensure that the SBG Group holds at least 6 per cent through the offer, with the rest being equally acquired by the two promoters.
In all, promoters' stake, if the offer fully goes through, would be increased to 70.8 per cent from 37 per cent as of March 2010.
Maytas suffered Rs 16 crore losses for the quarter ended June 2009. The company has been permitted to release results for the rest of the nine months by June 2010.