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Hyderabad/New Delhi/Mumbai, Aug. 31 The Union Government has decided to hand over the reins of management and promoter status of Maytas Infra Ltd (MIL), promoted by Mr B. Teja Raju (son of Mr B. Ramalinga Raju), to IL&FS.

IL&FS (Infrastructure Leasing & Financial Services), which holds 14.5 per cent equity, has been directed by the Company Law Board (CLB) to infuse Rs 55 crore as liquidity support and foreclose its rights on the pledged shares of 22.6 per cent shares, which will take its overall holding to 37.1 per cent. It will also make an open offer for 22.6 per cent and appoint four of its nominees including the Chairman on the board.

Interestingly, Maytas Infra was pushed into a financial crisis following the attempt by the Satyam Computer board on December 16, 2008 to buy out majority stake. After eight months of controversy and one crisis following another, the Hyderabad-based infrastructure company came out with financial figures for Q1 of fiscal 2009-10 and fiscal 2008-09 on Saturday showing losses of Rs 16.28 crore and Rs 489.79 crore respectively. Earlier in the day, the Government-appointed board of Maytas recommended to the CLB that the promoter and management of MIL be changed, based on the feedback from various lenders and investors.

The Corporate Affairs Minister, Mr Salman Khurshid, announcing the CLB’s decision at a news conference in New Delhi, said the change was with immediate effect. The existing promoter Directors, Mr B. Teja Raju (CEO), and Mr B. Narasimha Rao, will step down. The two Government-appointed board members will continue for two years. The Raju family owns 23 per cent stake which has a lock-in period till 2010. However, if liabilities arise, these will be dealt according to the law.

IL&FS has also been directed by the CLB to hold up to 26 per cent stake for a minimum period of two years and to retain management control.

The Government-nominated Director, Mr Ved Jain, said IL&FS’ 37.1 per cent stake and the open offer will make its stake worth Rs 350 crore at the current market rates.

“We have been asked by Maytas Infra’s principal lenders to take a lead position at a strategic level so as to revive the company’s fortunes and protect the interests of all stakeholders. We will also be talking to MIL’s venture partners in around 12 BOT projects to ensure their completion,” a senior IL&FS official said.

More Stories on : Real Estate & Construction | Mergers & Acquisitions | Financial Institutions | Open Offers

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