Hyderabad: Fraud-hit Satyam Computer Services Ltd’s government-appointed board expects to outline the bidding process and terms for the sale of a strategic stake in the new few days, chairman Kiran Karnik said.
The board is in the process of obtaining regulatory approvals for the auction procedures, Karnik said by a text message in reply to questions from Mint, adding that a “public release” of terms and conditions attached to the sale is expected shortly.
Satyam’s six-member board met in Hyderabad last week to consider the bid process, but didn’t publicly lay out a road map for the sale of new shares to a strategic investor.
The company is at the centre of India’s biggest fraud investigation after founder B. Ramalinga Raju on 7 January confessed to having misstated accounts to the tune of Rs7,136 crore.
The board, together with investment bankers Goldman Sachs and Avendus Capital Ltd, is “still working on the terms and conditions of the bid process”, minister for corporate affairs Prem Chand Gupta said on Sunday.
The induction of a strategic investor would help infuse much-needed funds into Satyam, whose accounts are being reaudited.
Karnik, who on 24 February said Satyam planned to start the search for a strategic investor, said there had been no delay in receiving regulatory approval. “There is no set schedule, he said. We are moving fast and the government and regulatory agencies have been very, very quick and fast,” he told Bloomberg.
India’s capital markets regulator last week amended take-over rules for companies where the government replaces the board to save them from collapse, paving the way for Satyam’s board to sell a stake to a strategic investor.
The relaxation may make it easier for suitors including Larsen and Toubro Ltd (L&T), India’s biggest engineering firm and the largest shareholder in Satyam, to bid for the software service provider.
Meanwhile, foreign institutional investor Fidelity Management and Research Llc. on Monday informed Indian stock exchanges that it had, through its entities, raised its holding in Satyam through open market purchases to 10.17%, close to the 12% L&T now holds. “We are purely portfolio investors,” Fidelity India spokeswoman Anjali Patil said when asked the reason for consolidating the stake in Satyam.
Satyam shares lost 2.9% to Rs40.30 on the Bombay Stock Exchange on Monday, a day on which the exchange’s benchmark index fell 3.2%.
Bloomberg’s Harichandan Arakali contributed to this story.