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Land-rich Maytas Properties scouts for strategic investor

Maytas Properties, a closely held realty firm run by Rama Raju, younger son of the defamed founder of Satyam Computers B Ramalinga Raju, may rope in a strategic investor or a collaborator to stay afloat.
Rama Raju, who has been charged of defrauding customers, is understood to be scouting for a strategic investor who may find the firm’s land bank attractive. The company could be valued at around Rs 3,500 crore, according to analysts.

Going by the promoters, Maytas Properties has a land bank of 6,800 acres spanning across Andhra Pradesh, Maharashtra and Tamilnadu. “The management of the company wants to rope in a strategic investor. This would ensure that existing projects on hand are completed and also enable the company to bag more projects after the revival of the realty sector,” said a source privy to the development.

A board member on Maytas Properties, however, said that an alternate option could be to have a collaborator.
Maytas Properties has been facing a severe credit crunch after Ramalinga Raju confessed to fudging the books of Satyam Computers.

The firm is also under probe for its links with Satyam. Investigating agencies suspect that the promoters may have diverted funds to buy real estate that is reeling under a down turn now. Raju also floated several front companies to buy and sell real estate.

The company’s projects have been halted due to want of funds and customers have filed a criminal compliant against Rama Raju.

“A couple of investors are currently doing a due-diligence , only after which they would look at signing the term sheet and thereby investing. The deal is likely to close with in a couple of months from now,” said the source involved in the talks.

According to an analyst, it is tough to assess the company’s financials as it is not listed on the stock exchange. “However considering the land bank they have, Maytas Properties could mean a safe bet,” said an analyst.

Parallely, the company is also nudging its existing bankers to lend extra funds of Rs 100 crore. “The company needs about Rs 150 crore to complete the existing housing project, Maytas hill County. The project is about 10 months behind schedule ,” Ved Jain, a government nominated member on the board of Maytas Properties told ET earlier.

Also, the company has denotified one of its three Special Economic Zones in the city outskirts. Two other projects — Jubilee Hills Landmark and Jubilee Hills Park View — have been halted due to the credit crunch.

Source: Economic Times

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