New Delhi: The global bidding process for the stake sale in crisis-ridden Satyam Computer will begin shortly, the company’s board member Deepak Parekh said on Thursday.
The software exporter has received market regulator Sebi’s approval to sell 51% of the stake through a global bidding process.
“The bidding process will begin shortly,” Parekh told reporters here after meeting Corporate Affairs Minister P C Gupta. Parekh, along with Satyam Chairman Kiran Karnik and board member Tarun Das, today met the minister.
Meanwhile, Gupta said the bidding process is being done on a “war footing” and added that a retired Supreme Court judge would be overseeing the whole process, which would ensure that it is done in a transparent manner.
“There is no delay ... The whole process is going on and it is being done on a war footing,” he noted.
The minister further added that bidders who have doubts on any issue can contact the Satyam board or the government for clarification.
Satyam received approval from Securities and Exchange Board of India to kickstart a process to sell a 51% stake, in a move likely to attract more bidders.
The company said in a statement, it expects to invite expressions of interest from qualified investors, with more than $150 million in net assets, under a global bidding process.
Shares in Satyam were valued at about $460 million as of Thursday’s close, a fraction of the $7 billion it was worth last May. The New York-listed firm is struggling to survive after its founder and chairman Ramalinga Raju quit in January, saying profits had been overstated for years and assets falsified.
Satyam’s government-appointed board wants to bring in a strategic investor to restore confidence among its about 50,000 staff and more than 600 customers, which include General Electric, Cisco and Qantas Airways.
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India’s top engineering firm Larsen & Toubro, which controls about 12% of Satyam, and diversified business Spice Group and Hinduja Group have been keen to buy Satyam - which has been mired in India’s biggest corporate scandal.
“I expect more players to join the race for Satyam as there is more clarity now,” said VK Sharma, head of research at Anagram Stock Broking.
“But it puts Larsen at a slight disadvantage as others are now equally placed and kind of guaranteed a 51% stake. So they will be more aggressive.”
As part of a two-phase sale process, a chosen investor would acquire newly issued equity shares representing 31% of Satyam’s share capital and then make a public offer to buy a minimum of 20% more, as required by Indian law.
In case the investor fails to acquire 51% even after the close of the open offer, it would be able to subscribe to additional equity shares, Satyam said in a statement.
Satyam shares surges 14%
Shares of Satyam Computer Services surged nearly 14% on bourses after the company received approval from Sebi.
Shares of the beleaguered IT firm surged by 8.26% to Rs38 on the Bombay Stock Exchange. On the National Stock Exchange, the scrip jumped by 13.67% to touch a high of Rs39.90.
The scrip was later trading at Rs36.30, up 3.42% on BSE. Satyam was trading at Rs36.55, up 4.13% on NSE. A total of 44.02 lakh shares of Satyam changed hands on the bourses.