MAYTAS INFRA LIMITED INDUCTS SAUDI BINLADIN GROUP AS STRATEGIC PARTNER

Hyderabad, June 20, 2010 : Pursuant to the recent visit of Dr Manmohan Singh, Hon’ble Prime Minister of India to Saudi Arabia and meeting with the Custodian of the Two Holy Mosques, King Abdullah to explore strategic relationships between India and Saudi Arabia, there has been a conscious effort towards forging closer business alliances between companies from both countries. There is a clear possibility of sharing complementary resources in terms of domain expertise, technology and intellectual & physical human capital. The ongoing efforts have resulted in the Saudi Binladin Group evincing interest in developing a business partnership in India

IL&FS Engineering and Construction Company Limited provides an ideal platform for developing a world class professionally managed EPC company in India : a much needed requirement. Pursuant to this desired positioning, the Saudi Binladin Group (SBG) of Saudi Arabia started business negotiations with Maytas Infra to be a partner to execute construction contracts in India and Saudi Arabia

SBG has executed a Shareholders Agreement in the august presence of Mr Talmiz Ahmad, Indian Ambassador to Saudi Arabia and Mr Faisal H Frad, Saudi Arabian Ambassador to India on June 19, 2010 for investing 20% in the equity share capital of IL&FS Engineering and Construction Company Limited at Rs 195.30 per share leading to an investment of around Rs 300 crores. The investment will be through a Preferential allotment of equity shares by IL&FS Engineering and Construction Company Limited . The SBG Group and IL&FS will make an Open offer to acquire an additional 20% from the market as per SEBI regulations. The induction of SBG into IL&FS Engineering and Construction Company Limited is a very positive development for the company. It also hightlights a closer working relationship between India and Saudi Arabia in the area of construction and infrastructure

SBG is the largest contractor, developer and diversified conglomerate headquartered in Jeddah, Saudi Arabia. The focus sectors of the Group include Roads, Railways, Tunnels, Buildings Airports and Townships. Over the years the Group has built strong technological credentials in various areas of the EPC business with execution of many prestigious projects in the region. The Group has around 90,000 employees, of which 6,800 are professional engineers in various disciplines. The underlying strategy of SBG is to provide customers design and build options by adopting the most advanced management, engineering and procurement systems resulting in cutting edge technological solutions. SBG is seeking to augment its portfolio and execution capacity in Saudi Arabia

The partnership of the SBG Group in IL&FS Engineering and Construction Company Limited envisages creation of a strong amalgam of technological and financial resource pools with a diversified presence across the entire infrastructure and contracting space. This will enable Maytas Infra rebuild its strengths in the EPC space through a steady flow of contracts, agglomeration of execution capacity, access to the Indian infrastructure space and servicing of large value national and international projects. IL&FS and SBG Group have agreed to work closely and provide business support to IL&FS Engineering and Construction Company Limited over a period of time. SBG would have access to opportunities in the booming Indian infrastructure space and simultaneously leverage upon the talent pool of Maytas Infra for strengthening its international capabilities. The partnership with IL&FS will enable SBG in project development skills and financial structuring capabilities to the region

With the induction of SBG, Maytas Infra is now well poised to systematically exploit niche segments of the EPC business. The company should be in a position to diversify its geographical and sectoral mix and introduce newer and more efficient processes and solutions to its customers. This would result in improved delivery times, cost savings and better quality of product. With these build blocks in place, Maytas Infra would be able to stage a quicker turnaround of operating and financial performance

The transaction is subject to regulatory approvals and successful consummation of the Corporate Debt Restructuring package

To view photographs of this event, please click here