IL&FS to put its engineering arm on the block – Times of India

MUMBAI: The board of Infrastructure Leasing and Financial Services (IL&FS) had decided to put on the block IL&FS Engineering and Construction Company (IECC) as part of the group’s resolution process. IECC comes under the ‘red’ category of subsidiaries, which means that the beneficiaries of the resolution process will be its largest lenders. These include SBI, ICICI Bank and IL&FS Group. The company has an outstanding debt of Rs 4,700 crore, part of which is owed to the promoter group.
IECC was incorporated in 1988, promoted by Ramalinga Raju as Satyam Constructions. A decade later, it was renamed as Maytas Infrastructure. The company was acquired in 2009 by IL&FS as part of the resolution of the crisis at Satyam after the fraud by Raju.
In his annual general meeting speech on Wednesday, IL&FS chairman C S Rajan said that one of the options under consideration for resolution is a change in the promoter for this entity, one who can provide the requisite support to the company to enable it to emerge stronger from this crisis and gain its due place in the infrastructure space.
The company is listed on the BSE and was last traded at Rs 4, which gives it a market capitalisation of Rs 52 crore. Over 42% of the shares are held by IL&FS with the balance widely distributed.
After the acquisition, IL&FS expanded capabilities in new verticals such as power, railways, and oil & gas. Before the IL&FS crisis broke out, the company had built up an order book of $1.5 billion, creating a pipeline for future revenue. EPC companies that are looking to expand their capability in urban infrastructure construction are expected to bid for IECC as it has been part of the metro project in Bengaluru and Gurgaon.