Fraud-hit Indian outsourcing giant Satyam Computer Services said on Monday it had started the bidding process to sell off a 51 percent stake.
Each interested bidder will have to show proof of availability of at least 15 billion rupees (288 million dollars) in funds and submit a detailed “expression of interest” to acquire the stake, a company statement said.
Satyam has been battling for survival since January when its founder B Ramalinga Raju, now in jail, stunned the corporate world by declaring he inflated the firm’s balance sheet by more than $1 billion and fudged its profits for years.
Satyam shares rose 14.01 per cent or 5.9 rupees to 48 rupees on Monday, after the announcement.
Last Friday, market regulator the Securities and Exchange Board of India gave the go-ahead for the stake sale to proceed in two phases.
The buyer would first acquire newly issued shares of the company representing 31 per cent of its share capital.
The purchaser would then make an open public offer, mandatory under financial market regulations, to acquire another 20 per cent of the firm, the statement said.
“Based on the submitted EOI (expression of interest), eligible bidders will be short-listed and given access to certain business, financial and legal diligence material relating to the company,” Satyam said in a statement to the Mumbai stock exchange.
Bids have to be submitted by 5:00 pm on Thursday (1130 GMT).
Once the bidder is selected, it will have to submit the subscription amount and funds for open offer, in an escrow account, within four days.
The bidding process will be overseen by a former Chief Justice of India or a former Supreme Court judge, appointed by the company.
The sale is going ahead even though it could be months before the full truth about the disgraced outsourcing giant’s finances emerge.
Satyam supplies back office services to close to 700 clients including 185 firms ranked in the Fortune 500 in nearly 70 countries around the world.