In a move that sets the stage for the buy-out of Satyam Computer Services, the Company Law Board (CLB) on Thursday allowed the government-appointed Board to bring in a strategic investor through an open bidding process.
For this purpose, the CLB also permitted the Board to increase the authorised share capital and issue preferential shares. With this, prospective bidders such as L&T, Spice Corp and the Hinduja Group can work out their buy-out strategies.
Currently, the authorised capital of Satyam is 80 crore shares of Rs2 each, of which 67.3 crore shares have already been issued. The CLB has authorised the Satyam Board to pass a resolution to amend the capital clause of the memorandum of association to raise its authorised capital.
Accordingly, the authorized capital of Satyam will increase from Rs160 crore comprising 80 crore shares, to Rs280 crore comprising 140 crore shares. This move is a positive for Satyam and will thus speed up the process of getting on board a strategic investor.