Cleaning Raju's Augean stables

Maytas Infra has been under scrutiny since Ramalinga Raju confessed to the country's biggest accounting fraud at his software firm Satyam Computer Services in January 2009. This was two weeks before Satyam tried to merge Maytas into itself. Maytas has subsequently faced a credit squeeze and lost several key contracts adding up to Rs13,000 crore. Here's a closer look at how the company plans to repay its creditors.

Firesale to...
The company is unlocking its investments to repay debtors. It sold its stakes in Bangalore Elevated Tollway Ltd, Cyberabad Expressway Ltd and Hyderabad Expressway Ltd, among others, to a trust formed for restructuring its debt.

... pay off debts
To this trust, named Maytas Investment Trust, the company has transferred its investments adding up to Rs 310 crore in diverse build-operate-transfer projects at fair value aggregating to Rs 575 crore. The company has also transferred equivalent amount of bank liabilities to the trust based on the approved debt restructuring package.

It states that "the trust has in turn issued pass through certificates to the lenders and has vested the economic benefits arising out of the foregoing investments to the lenders." It'll also hypothecate intercorporate deposits aggregating Rs 390 crore in favour of the lenders.

Now a contractor...
Analysts who have tracked the company see two messages from this: One, a clear move to clean up the books. Two, it is giving up the legal rights to the benefits from its assets and linked itself only to the liability. "The company has also in a sense monetised its assets and has now turned itself into a pure contracting company," points out Jayesh Desai, Managing Director, Enam Infrastructure Funds Management.

... with a long way to go
The company is far from a turnaround as it still has debt of Rs 900 crore on its books.