Infrastructure Leasing and Finance Company is poised to acquire management control of the troubled infrastructure company Maytas Infrastructure owned by family members of Ramalinga Raju, former chairman and managing director of Satyam Computers, who confessed to financial fraud on January 7.
The leading non-banking finance company is emerging as a government preference given its prominent role in infrastructure finance in the country. IL&FS is among 19 banks and financial institutions that have collectively lent Maytas Infra Rs 5,000 crore and is partner in several major Maytas projects including the Hyderabad Metro.
The state government, which has awarded many critical projects to the company, is also reportedly in favour of an early solution. Sources said a high-level meeting between senior officials of the state government and IL&FS officials took place on Tuesday.
IL&FS, IFCI and small industries lender Sicom had extended loans to the Raju family against Maytas Infra shares. These lenders, therefore, had asked the government to supersede the board of the Hyderabad-based company and requested a relaxation of open offer norms that require companies to offer shareholders an average of the last six months' price.
Maytas Infra's share price fell to Rs 51.55 at close of trade today from Rs 497 on December 16, when Raju was forced to retract a proposal for Satyam to buy stakes in Maytas Infra and Maytas Properties (an unlisted promoter-owned firm) following strong shareholder protests. At current prices, therefore, any open offer would be overpriced.
The Raju family had pledged around 20 per cent of Maytas Infra's shareholding to IL&FS but the institution has chosen not to transfer this holding in its name because this move would trigger the open offer provision.
Government sources said the proposed exemption in the open offer that the Securities and Exchange Board of India is considering for Satyam may be extended to Maytas Infra because the circumstances are similar.
"There is an urgency to revive the company to protect the interest of lenders and all the existing projects that are under progress," a government official said.
An IL&FS spokesperson declined to comment on the issue.
