IL&FS may infuse Rs150 crore in Maytas Prop

After taking control of the ailing Maytas Properties, a property development firm promoted by the family members of the tainted founder of Satyam Computer Services B Ramalinga Raju, IL&FS now sees an immediate need to infuse at least Rs150 crore into the company for reviving its operations.

Maytas Properties was formally handed over to IL&FS by the Company Law Board (CLB) on January 14 by allowing it to hold up to 80% of the firms’s equity. However, the property company has a low equity base of about Rs5 lakh.

The new promoter, sources said, sees an immediate need in reviving the company’s jinxed luxury residential project - Maytas Hill County. The project had grand plans to build luxury residential units for high networth individuals and had raised about Rs600 crore in the form of advances from potential buyers.

However, at least Rs220 crore from these funds is believed to have gone out of the company’s books, possibly to Satyam.
Though the initial requirement would be to the tune of Rs150 crore, sources said the revival of Hill County would need about Rs300 crore.

“There are these potential buyers willing to pay the additional money provided the management is serious on completing the project in a time-bound manner. But so far in the last two years there has never been any assertive statement from the management on completing it,” the source said.

Now, the board restructuring is likely to see four IL&FS executives joining the board of Maytas Properties. IL&FS is also said to be keen on sourcing the immediate capital requirement internally.
“While completing Hill County is likely to be a major challenge, the other challenge is in the form of getting the land back from authorities. Several acres of land bought by the Rajus and held under Maytas Properties was attached by the authorities including the Enforcement Directorate. There is still no clarity on how IL&FS would deal with this since this runs straight into the Satyam scam investigation,” the source said.

The government had taken over the control of the Maytas Properties in 2009 and had nominated its directors on the board. Now, with the CLB handing over the reins of the company to IL&FS, the board is likely to undergo a reshuffle in the next few days. “Maytas Properties is a bigger puzzle. May be bigger than Maytas Infra. It takes time for the new management to put the house in order,” a source said.