Mumbai: Indian engineering and construction firm Larsen & Toubro has not taken a decision to sell its stake in outsourcer Mahindra Satyam, a senior official at Larsen told CNBC-TV18 on Monday.
“No decision at the board or management level has been taken (to sell our stake in Mahindra Satyam). It is some kind of an enabling situation we wanted to create,” Larsen’s chief financial officer, Y M Deosthalee, told the television channel.
Last week, the company — which had lost out in the race for a controlling stake in Satyam — said it had sought permission from market regulators to sell its stake in the outsourcer.
The 12% stake, which Larsen had built up in Satyam prior to its sale, is no longer strategic after Larsen lost out on the bid to acquire the outsourcer, Deosthalee said.
“It is now converted to the level of a portfolio investment,” he said, adding that it would exit the company at an opportune time, but was in no immediate hurry.
Based on the expanded share capital after Satyam’s takeover, Larsen’s stake in the company is at 6.9%.
“Today it is not so much of a strategic stake because in no way we are going to claim anything in that company,” said the CFO of Larsen, which has a small outsourcing unit — L&T Infotech.
Satyam, once India’s fourth-largest software services firm, was put up for sale after being rattled by the country’s biggest corporate fraud. It was eventually bought by software firm Tech Mahindra.
Under the conditions of the Satyam sale, bidders for the company are barred from selling their stakes, acquired prior to the bid, for six months as they were given access to Satyam’s financial information that was not public at that time.
“The agreement we have signed... doesn’t have much importance now,” Larsen’s Deosthalee said.
Shares in Mahindra Satyam were trading down 1.7% at Rs100.75 at 12.32 pm, while the main index was down 0.6%.