CLB clears Satyam 26% stake auction | business | Hindustan Times
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CLB clears Satyam 26% stake auction

business Updated: Feb 19, 2009 22:23 IST
Mahua Venkatesh

Decks have been cleared for a likely change of ownership of scam-scarred Satyam Computers with the Company Law Board (CLB) granting approval for raising the firm’s authorised share capital and a public auction for sale of at least 26 per cent stake.

“The Board will decide on the modalities. It will be an open offer without or disfavouring any party,” corporate affairs minister PC Gupta said.

The CLB has cleared the proposal and bids would be invited for the same. It has also allowed the company to increase its authorised share capital to Rs 280 crore from the present Rs 160 crore.

“The process has been initiated and it would be held in a completely transparent and fair manner shortly,” a senior government official told Hindustan Times.

The eligibility criteria would be chalked out by Goldman Sachs and Avendus Capital, the investment bankers of the beleagured IT firm. A retired Supreme Court judge would be appointed to oversee partner induction.

The company would also consider making "preferential allotment of equity shares or other securities, for financing" its operating and capital costs and other financial needs.

The funds received by the company through the auction would be kept in a “no-lien account” with IDBI Bank and Bank of Baroda.

L&T Chairman AM Naik, whose company holds a 12 per cent stake in Satyam, said a clearer picture would emerge only after the details of the auction are made public.

“We will take a view only after studying the print,” Naik told HT.

Spice Group chairman BK Modi, who has made known his company’s intention to acquire the tech firm, said auction should be held for 51 per cent stake.

“At least 51 per cent stake should be auctioned through a transparent price discovery mechanism such as the e-auction system,” Modi told HT.

The Hinduja Group said it has officially told Goldman Sachs that it was interested in buying a strategic stake in tech company. “We are awaiting the final modalities from Satyam’s board,” Ahok Hinduja told HT.