Indian builder Maytas Infra Ltd, linked to the fraud-tainted founders of Satyam Computer, is in talks to restructure $34 million loans, officials said on Tuesday, sending its shares up 5 percent.
“We are having a financial difficulty. Cash-in-hand may be there, but I have a liability also,” Ved Jain, one of the four directors appointed by the government after it began a probe into Maytas, told a news conference.
The cash-strapped company is negotiating with its 17 lenders, including State Bank of India and ICICI Bank, to restructure its debt of 17 billion rupees ($34.5 million), he said.
Anil Agarwal, another director, said the board had approved a a corporate debt restructuring package. “In the next couple of weeks this will be on,” he said.
The company will hire SBI Capital Markets to implement the restructuring, the officials said.
Jain said the board would pursue 5 billion rupees in receivables from customers as part of a mandate to revive the company that has seen orders being cancelled and customers worrying over the company’s credibility.
Maytas, which is controlled by the family of Satyam’s former chairman Ramalinga Raju, has orders worth 85 billion rupees, the officials said.
It was also awarded a 150-billion-rupee metro project in the southern city of Hyderabad, but Maytas missed a deadline to tie up funds for the project. The company has applied to the authorities for more time for the financial closure, Jain said.
The company has been under the government’s scanner since early January when Raju resigned from Satyam after revealing profits at the outsourcer had been falsified for years.
In April, Satyam’s government-appointed board sold a 31 percent stake in the outsourcer to Tech Mahindra Ltd after a global bidding to help revive the company.
Agarwal said 85 percent of Maytas was controlled by the Raju family, and the officials said they would not rule out a stake sale as an option to get Maytas back on the rails.
Maytas officials declined to talk about the government investigation that began in January, soon after the Satyam fraud was disclosed.
Shares in Maytas, whose market value has plunged three-quarters to $49 million since early January, rose by its daily limit of 5 percent to 41.05 rupees in a flat Mumbai market on Tuesday.
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