Tech Mahindra to absorb Satyam

Tech Mahindra to absorb Satyam
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First Published: Tue, Jun 23 2009. 11 43 PM IST

New head: C.P. Gurnani has been named Mahindra Satyam’s CEO. Hindustan Times
New head: C.P. Gurnani has been named Mahindra Satyam’s CEO. Hindustan Times
Updated: Wed, Jun 24 2009. 10 17 AM IST
Mumbai: Information technology services provider Tech Mahindra Ltd plans to absorb its new unit Mahindra Satyam to create a top-tier Indian outsourcing firm, the vice-chairman of the two outsourcing firms said on Tuesday.
Tech Mahindra won an auction in April for a controlling stake in Satyam Computer Services Ltd, which was struggling for survival after being hit by a $1 billion (Rs4,890 crore) accounting fraud by its founder.
“It is logical and there are a lot of synergies. I am afraid I can’t give a time right now. It will be in the foreseeable future,” Vineet Nayyar said at a news conference.
New head: C.P. Gurnani has been named Mahindra Satyam’s CEO. Hindustan Times
The firm has met with Satyam customers and employees to boost morale and created a virtual pool programme under which around 9,000 employees who were not working on any projects for three months were asked to stay away from office to cut costs.
“Right now we have to roll up our sleeves and get the car back on track,” said Anand Mahindra, vice-chairman of the group, which also runs top utility vehicle maker Mahindra and Mahindra Ltd.
On Tuesday, C.P. Gurnani was named the new chief executive of the rebranded Mahindra Satyam. He said a reorganization of the unit’s structure would be announced in the next two days. Gurnani said there had been “practically no customer attrition” at Satyam since Tech Mahindra, which is 31% owned by UK’s BT Group Plc., won control in April. The firm had taken 446 employees from the virtual pool to meet increased business, he added.
Earlier, Tech Mahindra said it planned to sell 13.6 million shares to institutional investors. The firm said it would use the funds to repay some of the debt taken for the Satyam deal, which is valued at more than $550 million.
Tech Mahindra shares rose 1% to Rs747.45 while Satyam shares fell 5% to Rs73.20 in a flat market.
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First Published: Tue, Jun 23 2009. 11 43 PM IST