Re-assessing Maytas Infra's assets must: Feedback Ventures

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Re-assessing Maytas Infra's assets must: Feedback Ventures

Vinayak Chatterjee, Chairman, Feedback Ventures, said new board of Maytas Infrastructure must re-assess inventory of assets, as inventory, valuation of assets and money flows are key issues for Maytas jow. "However, I see strong chances of many Maytas Infra projects to be revoked.”

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Q: Do you think any other infrastructure company would walk into Maytas right now because if the board tries to - I mean that's one of the options for the board to try and sell it like the board of Satyam is doing it. Do you think it is possible that other infrastructure companies would want to take this up?

A: I do not think it would be for reasons like the business of Maytas is in two distinct segments real estate and property development, the other is in transportation which is Hyderabad Metro. I do not think companies straddle both these sectors with ease. So the real estate companies would be interested in the real estate portion and people in the LRT (Light Rail Transit), MRT (Metro Rail Transit) business would be interested in that project.

But the overall situation is that, I do not think anybody would be interested to the best of my knowledge in acquiring Maytas; you will probably have to sell pieces of Maytas project by project or property by property as individual bits and pieces that would be my advice to whichever new board in a sense handling Maytas.

Q: Who do you think might get priority to be on the board? We have heard from a couple of stake holders who are interested in board representation. Will this work exactly the way Satyam did with the government basically chose the faces they wanted to be on the board or do you think in this it could be different and some key stakeholders could get reasonable representation on board on what to do next?

A: The lesson that I have learnt from the Satyam is that Government of India and the board's position has been that they have kept professionals on the board and have invited any stakeholders into the board of Satyam. So, I suspect that the bidding process and the takeover process is completely impartial, neutral and professional. So my bet will be on the fact that no stakeholders will be invited to the Maytas board so that a completely neutral and professional board would first we able to get its arms around the exact situation at Maytas; projects, processes unpaid bills, State Government concessions all of that. I think the discussions with stakeholders will happen on side but not on the board.

Q: Where you see the equity shareholders in this entire pecking order. How high or low do you think the priority will be to give shareholders something back?

A: I do not think there is going to be any short-term palliates on the horizon. I think Maytas shareholders will certainly have to wait for the long haul till the whole tangle and the mess is sorted out. I wouldn't create any hopes of any short-term solution.

Q: This question has two parts: (a) Do you think it's easy to prove something like a government being involved as is the suggestion in Andhra Pradesh of handing out projects to a particular party in return for some kind of favours. Is it easy to pin down or prove and (b) do you think this could end up blowing the lead of a much bigger State Government, private infrastructure operator nexus because we keep hearing of some kind of tacit deals which are pretty much done thing in the sector in the ward of state projects?

A: It is not very difficult to investigate the nature and process by which projects were handled out because if it was pure MoU based handing out which is given to a single party that certainly is not in keeping with the tenants of governance. So that's a clear case. But in case there have been manipulation in a so called bid process that also can be easily found out if the files are called and the process is duly investigated. So my feeling is that it's not very difficult to figure out what kind of give and take happened between politicians and Maytas in the ward of different projects. It's not difficult at all and you are right there again that if there is due diligence done right now or a post-mortem it might blow the lead of a whole lot of public system processes, that is a genuine fear.