IL&FS Financial Services makes open offer to buy 22.51% more shares of Maytas Infra

Infrastructure firm IL&FS Financial Services Limited has offered to buy 13.25 million equity shares (22.51%) of paid-up capital in Maytas Infra Limited at Rs 112.80 rupees a share. IL&FS already holds 14.50% equity shares in the cash-strapped Maytas Infra.

In a public announcement made to the shareholders of Maytas Infra, IL&FS said that its open offer will start on October 24, 2009, and close on November 12, 2009.

“The open offer,” the public announcement by IL&FS explained, “is made to all the shareholders of Maytas Infra to buy over 1.17 crore (up to 1,17,82,620) shares of the target company (Maytas) forming 20% of the voting capital of the company at a price of Rs 112.80 a share.”

The open-offer price is over 9% lower than Maytas Infra’s current price of Rs 124.30 on the Bombay Stock Exchange (BSE).

The total consideration payable under the open offer will be Rs 132.91 crore. Once the offer is successfully completed, the holding of IL&FS Financial Services Limited in Maytas will go up to 57%.

SBI Capital Markets Limited, which manages the offer, said in a newspaper advertisement that IL&FS will spend Rs 1.49 billion to buy the additional stake in Maytas Infra.

IL&FS, according to the advertisement, is to hold a minimum 26% of equity in Maytas Infra for at least 2 years and will keep management control of Maytas during that period.

In a statement issued on August 31, 2009, Maytas Infra had said that, based on its application, the Company Law Board has instructed it to induct IL&FS Financial Services as a promoter and also let IL&FS to assume management control.

Maytas Infra had been controlled by the family of Ramalinga Raju, the founder of the software company Satyam Computer Services. Raju resigned from Satyam Computer Services in January 2009 after he revealed that the software firm’s profits had been exaggerated for many years, and Maytas has been put under the government scrutiny.

It may be recalled that IDBI Bank, ICICI Bank and State Bank of India – the main lenders to Maytas – had invited IL&FS Financial Services Limited to play a key role in Maytas Infra in order to help revive it.