Monday, Jun 21, 2010

(Adds CEO's comments, background) 


 
   By Ankur Relia 
   Of DOW JONES NEWSWIRES

MUMBAI (Dow Jones)--The Saudi Binladin Group aims to have a stake of at least 26% in India's Maytas Infra Ltd. (532907.BY) after the completion of an open offer which it has launched along with Infrastructure Leasing & Financial Services Ltd., Maytas Chief Executive Vimal Kaushik said Monday.

The Saudi Binladin Group, through its investment holding company SBG Projects Investments Ltd., agreed over the weekend to buy 20% of Maytas for INR3 billion by subscribing to preferential shares at INR195.30 apiece.

Earlier Monday, SBG Projects and IL&FS offered to buy up to 20% of Maytas via the mandatory open offer, which opens Aug. 12 and closes Aug. 31. IL&FS and unit IL&FS Financial Services Ltd. are the controlling shareholders of Maytas with a 37.01% stake as of March 31.

Maytas shares closed 3.2% down Monday at INR204.50 on the Bombay Stock Exchange, lagging the 1.7% gain in the benchmark Sensex.

Kaushik told Dow Jones Newswires that Maytas plans to use part of the funds it will receive from the Saudi Binladin Group to pay debt, while the majority will be used for working capital requirements.

He declined to comment on how much would be used to pay off debts. "We don't have any urgent debt repayment obligations," Kaushik said.

The Saudi Binladin Group couldn't be contacted for comments.

Apart from the preferential share allotment to the Saudi Binladin Group, Maytas' share capital would also expand after it converts some debt into preferential shares. Maytas said Sunday it will reduce its borrowings to INR8 billion from INR18 billion by settling some loans with its lenders and by converting some debt into preference shares as well as other equity instruments.

Separately, IL&FS Financial Deputy Managing Director Milind Patel said the company plans to acquire another 7% stake in Maytas through the open offer. He didn't say what will be IL&FS' stake in Maytas after the preferential allotment to the Saudi Binladin Group and the lenders.

Maytas Infra was founded by family members of Satyam Computer Services Ltd.'s (SAY) erstwhile chairman B. Ramalinga Raju. Satyam was embroiled in an accounting scandal in 2009 after Raju admitted to cooking the books and inflating profits for several years.

As the Satyam scandal broke, many of Maytas' clients in the infrastructure sector yanked back their orders, plunging it into a crisis. IL&FS took a controlling stake in Maytas in August 2009, as the Raju family exited the company.

Maytas' Kaushik also said that the company will open a subsidiary in Saudi Arabia to tap the Middle East market. "We would like to open it (subsidiary) as soon as possible. We plan to start with operations in Saudi Arabia to start with, which is a huge market."

This will be Maytas Infra's first overseas venture, he said.

-By Ankur Relia, Dow Jones Newswires; 91-22-6145-6112; ankur.relia@dowjones.com

(END) Dow Jones Newswires

21-06-10 1334GMT