Tuesday, September 1, 2009

Maytas- A Fish story....

IL&FS takeover of Maytas. Is it good money after bad or just a change in status, with the money already having been lost? Having lent huge amounts to the promoter against shares in Maytas, the ownership was already there. Suspect that there is also huge lending and co-investment in projects by IL&FS and other institutions, which could have gone sour had Maytas been hurled in to bankruptcy. So, this move will perhaps help all to salvage some accounting value rather than real cash flow. One fails to understand how a company like this could have lost a sum of nearly Rs.5 billion in one accounting period. There were also talks that many properties that are supposed to belong to Maytas the company face issues relating to title and traceability. Now, there is a long haul. With IL&FS admitting that the company needs 'recapitalisation' one does not have to read between the lines to figure out that what is gone in to the company now, has perhaps vanished.
These kind of bail outs smell. Do not think that any one would have shed tears if Maytas had folded.

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