Tech Mahindra to absorb Satyam at some stage
Tech Mahindra plans to absorb its new unit Mahindra Satyam to create a top-tier Indian outsourcing firm, the vice chairman of the two outsourcing firms said on Tuesday.business Updated: Jun 23, 2009 21:18 IST
Tech Mahindra plans to absorb its new unit Mahindra Satyam to create a top-tier Indian outsourcing firm, the vice chairman of the two outsourcing firms said on Tuesday.
Tech Mahindra won an auction in April for a controlling stake in Satyam Computer Services, which was struggling for survival after being hit by a billion dollar accounting fraud by its founder.
"It is logical and there are a lot of synergies. I am afraid I can't give a time right now. It will be in the foreseeable future," Vineet Nayyar said at a news conference.
The firm has met with Satyam customers and employees to boost morale and created a virtual pool program under which about 9,000 employees who were not working on any projects for three months were asked to stay away from office to cut costs.
"Right now we have to roll up our sleeves and get the car back on track," said Anand Mahindra, vice-chairman of the group, which also runs top utility vehicle maker Mahindra & Mahindra.
On Tuesday, CP Gurnani was named as the new chief executive of the rebranded Mahindra Satyam, and he said a reorganisation of the unit's structure would be announced in the next two days.
Gurnani said there had been "practically no customer attrition" at Satyam since Tech Mahindra, which is 31 per cent owned by Britain's BT Group , won control in April. He also said the firm had taken 446 employees from the virtual pool to meet increased business.
Earlier, Tech Mahindra said it planned to sell 13.6 million shares to institutional investors. The firm said it would use the funds to repay some of the debt taken for the Satyam deal, which is valued at more than $550 million.
Tech Mahindra shares rose 1 percent to 747.45 rupees while Satyam shares fell 5 per cent to 73.20 rupees in a flat market.