The discredited board of Satyam Computer Services Ltd now has one final chance to salvage its tattered reputation.
The board needs to move swiftly and decide what is to be done with the company. Prolonged uncertainty will further harm shareholders and employees, and perhaps take Satyam to a point of no return.
The best option is a quick sale to one of Satyam’s competitors. But we doubt any company—listed or unlisted—would want to dive into the troubled waters right away. A better option would be a sale to a private equity fund or a vulture fund at a deep discount. The buyer will then profit by either restructuring Satyam or selling it off in bits and pieces.
The board could do this on its own, by slicing and selling Satyam vertical by vertical to competitors. The extreme option would be liquidation, though such winding up is neither desirable nor easy.
There could be litigation on the way, as creditors claim rights over assets and cash flows. The true mettle of the Satyam board will be tested.