Satyam to invite stake bids by 10 March

Satyam to invite stake bids by 10 March
PTI
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First Published: Sun, Mar 08 2009. 04 36 PM IST
Updated: Sun, Mar 08 2009. 04 36 PM IST
Mumbai: The government-appointed board of Satyam Computer plans to invite bids for a strategic investor early this week and hopes to complete the selection process within a month, a top source said.
“The Board proposes to invite Expressions of Interest (EoIs) ... by Tuesday. Once this is done, the selection process could be completed within three-four weeks,” the source said. The Board is likely to meet in Hyderabad on Friday.
A host of players including engineering major Larsen & Toubro, the B K Modi-led Spice Group and the Hindujas, have evinced interest in acquiring Satyam.
L&T, which has more than a 12% stake in Satyam, is understood to have appointed investment bankers Citi and Nomura to advise it on a possible deal with Satyam.
The Hyderabad-based IT major had recently received approval from market regulator Sebi to conduct a global competitive bidding process to enable it to sell a 51% stake in the company to a strategic investor.
The strategic investor can acquire up to a 31% of Satyam’s share capital through a preferential allotment and the balance 20 per cent through an open offer.
The Satyam Board, which is believed to have finalised the modalities in terms of pricing for the bidding process, is in consultation with its two investment bankers - Goldman Sachs and Avendus - to quicken the process, the source said.
The Board in its meeting scheduled for Friday will assess the prevailing situation in Satyam including the collection of receivables, status of new orders and progress of the bidding process, the source said.
Though the Board prefers an Indian player as a strategic partner, the final decision will be taken after evaluating all factors including the capability of the investor to mobilise working capital for the crisis-ridden company, the source said.
“The acquirer may not enjoy the assistance of this Board (the Government-appointed Board) as the present Board may not continue for long post the buy-out,” the source said, adding “investors will have to factor this in while taking their call”.
The Hyderabad-based IT-major has now achieved a measure of financial stability, the source said, adding that since the new Board took over, the company has gained more business than what it lost in the January-February period.
The company, which had secured Rs600-crore worth credit from IDBI Bank and Bank of Baroda by pledging a portion of its land-bank in Hyderabad, might not seek more loans in the immediate future, the source said.
“Currently, liquidity is sufficient. The Board may get bank loans sanctioned ... in the case of an emergency but may not use it (the loan sanctions) until the need arises,” the source said.
On the restatement of Satyam’s financial statements, the source said that it might take some more time but the Board is pressing its auditors - KPMG and Deloitte - to finish the work “as early as possible”, the source said.
The Hyderabad-based IT-major plunged into a crisis after its former Chairman, B Ramalinga Raju, admitted that he manipulated the accounts of the company for several years by overstating its profits and understating liabilities.
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First Published: Sun, Mar 08 2009. 04 36 PM IST
More Topics: Satyam Computers | Board | Bidding | Stake | Fraud |