The intervention plan includes cost cutting, new orders, diversification of order book and renegotiation of the CDR package. In the long term, IL&FS is planning to boost Maytas’ market capitalisation to Rs 5,000 crore from the current Rs 800 crore.
“IL&FS is contemplating to give a big push to Maytas Infra’s order book by outsourcing its contracts to the Hyderabad-based infra firm. Recently, IL&FS has awarded Rs 800 crore order to Maytas Infra and plans to outsource Rs 2,000 crore worth of projects in two to three months,” sources told this correspondent quoting the chairman, Mr Ravi Parthasarathy.
The Mumbai-based Mayt-as promoter is currently executing projects totalling around Rs 10,000 crore across India.
New contracts could probably be in the power sector as the promoter wants Maytas to diversify its order book, which currently consists of predominantly irrigation projects awarded by the Andhra Pradesh government. “Maytas will also focus its attention on getting orders from the private sector,” the source said, adding that IL&FS plans to increase Maytas’ market capitalisation to Rs 5,000 crore from the current Rs 882 crore.
Earlier under the management of the Ramalinga Ra-ju family, Maytas Infra us-ed to attract criticism from analysts due to its excessive dependence on government projects, which they felt could land the company in trouble, if the government delays its payments.
On the finance front, Maytas will have to cut down its overheads and improve its costing. The new Maytas management, the source said, will renegotiate the Corporate Debt Restructuring, which imposed stringent conditions on the company, including a clause that requires the Maytas management to seek permission from lenders for every important decision.
Under the current CDR, a consortium of lenders incl-uding ICICI Bank, SBI and IDBI released Rs 100 crore working capital, Rs 200 crore loan guarantees and a three year moratorium on the Rs 1,600 crore debt.
Maytas promoter’s prescription
w IL&FS plans to give Rs 2,000 crore worth projects to Maytas in two to three months.
w IL&FS plans to give Rs 2,000 crore worth projects to Maytas in two to three months.
* Diversification of Maytas order by focusing on power projects.
* The market capitalisation will be boosted to Rs 5,000 crore in the long run.
* Renegotiation of Rs 1,600 crore CDR package to give more freedom to the management to run the company.
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