Financial closure for Hyderabad Metro Rail project is to be delayed

Hyderabad: Maytas Infra Ltd is now certain to miss the deadline of six-months for achieving financial closure for the Rs 12,132-crore Hyderabad Metro Rail Ltd.

The consortium led by Maytas Infra, includes Nava Bharat Ventures Ltd, IL&FS and Ital Thai. IL&FS was leading the loan syndication for the project.

According to sources in the Andhra Pradesh Government, which is a co-developer of the project, in all certainty, the company and its consortium members are unlikely to achieve financial closure.

Asked about the implications of the delay, the source said they will have to fall back on the agreement and necessary legal counsel. As things stand today, the very execution of the project is now uncertain. With the general elections slated for April-May, no decision is likely on the follow-up action.

According to the agreement, Maytas Infra has to pay Rs 50 crore on the date of financial closure and also furnish the Government guarantee of Rs 240 crore.

Sources said the matter of funding has become much more difficult for Maytas Infra and its partners given the turmoil the company is facing after the attempt by Mr B. Ramalinga Raju, founder of Satyam Computer and Maytas, to acquire the latter.

The third quarter financial results of the company, earlier slated for the last week of January, have not yet been announced as the company sought extension of time. This move coincided with some of the Board members, including Mr R.C. Sinha, Chairman of the board, exiting the company.

The company shares, which ruled at peak of over Rs 750 crore in first half of 2008, continued their downslide to double digits after some of the large contracts fell through. The scrip closed the day at Rs 34.45 (previous close Rs 35.90).