In a move aimed at shoring up Maytas Infra's networth and perhaps staving off a possible attempt by erstwhile promoter Teja Raju to get a foot into the company again, the company's new owner IL&FS is negotiating with lenders to convert around Rs 600 crore of the company's debt into equity.

As part of the corporate debt restructuring (CDR) rework, IL&FS has already written to IDBI, which heads the Maytas lenders' consortium, seeking conversion of one-third of Maytas' debt of over Rs 18,00 crore into equitythrough preferential allotment, sources said.

The move will not just reduce the company's debt but also enhance networth that had eroded by over 50% in the aftermath of the Satyam scam, they added. However, bringing lenders on the Maytas board could also be a good way to stave off a possible attempt by Teja Raju to try and get a say in the running of the company in future, say analysts.

Though Raju was asked to step down from the company's board by a Company Law Board (CLB) order of August 31, 2009, that handed over Maytas to IL&FS, to whom the Raju family had pledged 37.01% of their stakeholding soon after the company's IPO in October 2007, the Raju family still holds a substantial 23% stake in the company.

"Though this stake is locked till Oct. 2010 as per Sebi's IPO norms, the possibility of the Rajus holding additional equity through hitherto unknown sources cannot be ruled out. Raju could then make an attempt to get back a seat on the board," said an analyst.

Maytas Infra's operations had come to a standstill after Ramalinga Raju's confessions that he fudged Satyam's accounts. Even as banks refused to lend money, it lost several orders including the Rs 12,132 crore Hyderabad Metro Rail project.