Was it meant to be a bailout for Maytas cos?

HYDERABAD: Was the decision to empty the coffers of Satyam Computer Services in favour of Maytas promoters and take over the two construction and infrastructure companies a bailout attempt?

This is one question many analysts are asking even after the acquisition deal has been called off.

While senior executives of both Satyam and Maytas deny such intentions, a top source said it was indeed a bailout package since Maytas is seeking to strengthen its balance sheet to bid for bigger projects on its own.

By getting into the Satyam fold, Maytas would have enjoyed the combined balance sheet and the strong topline support of the fourth-largest IT company in the country. 

In fact, the source said, the company is also finding it hard to achieve financial closure for some projects even after winning them.

Though Maytas Infra has already achieved financial closure for some of its projects, it’s Rs 2,000 crore Hyderabad Metro Rail project is being seen as a drag with the company unable to bring financial institutions together to fund it.

Additionally, the project became controversial after Delhi Metro chief E Sreedharan criticised the deal.

But company officials put on a brave face. “Hyderabad Metro is a good project and we are on track for achieving the financial closure.”

“The Satyam controversy is not likely to affect Maytas plans,” Maytas Infra’s chief financial officer V V Raju told DNA Money.

According to him, the company would achieve financial closure for the project as scheduled in March 2009.

But more than the financial closure, it is the company’s ability to bid for bigger projects that’s seen to be one of the reasons for the Satyam to decide on acquiring it and taking Maytas into its fold.

“Maytas has been bidding for many projects jointly. For instance, for the Rs 200-crore airports deal in Karnataka and Rs 1,200 crore port project in Machilipatam, it had to team up with NCC. For the Hyderabad Metro too, it had to team up with Navabharat group. The list goes on. For bigger projects, Maytas is teaming up with others to meet the balance sheet requirements. A merger with Satyam would have been a definite bail out for Maytas,” the source explained.

Meanwhile, there have also been unconfirmed reports about Maytas promoters coming under severe financial crunch due to the land acquisitions they had made in the recent days and the real asset yielding less returns due to the negative real estate market.

These reports also pointed the mortgage of shares by Maytas promoters to raise further funds. “We don’t know what the promoters have done in their individual capacity. For Maytas there is no specific funding problem to execute the Rs 11,000 crore order book,” Raju said.