Satyam suspense set to end next week
Employees, customers and lenders of the Satyam Computer Services are keenly awaiting the final stretch of the auction process to award a strategic controlling stake in the company, expected to kick off on Monday. Mahua Venkatesh reports.business Updated: Apr 10, 2009 22:54 IST
Employees, customers and lenders of the Satyam Computer Services are keenly awaiting the final stretch of the auction process to award a strategic controlling stake in the company, expected to kick off on Monday.
The government-appointed board of the fraud-mauled firm has indicated that the result would be made public on that day itself.
Several bidders including the Hinduja group and US based outsourcing major iGATE have backed out citing a lack of clarity and transparency in the entire auction process, particularly on details of the firm’s liabilities.
Remaining bidders have said they are in the dark about the liabilities, both financial and legal.
The Board has not stipulated a minimum floor price as the capital market regulator Securities and Exchange Board of India has waived the requirement.
The successful bidder will be given four days to deposit the amount for the strategic stake and the requisite funds for the mandatory public offer in an escrow account.
The strategic sale process of the company will be completed in two phases. In the first phase the selected investor would acquire newly issued equity shares representing 31 percent of Satyam’s share
capital, which would be followed by the public offer for 20 per cent.
Bidders like Larsen and Toubro and Tech Mahindra are still in the race. Unconfirmed reports suggest US-based private equity firm WL Ross has teamed up with Coginzant Technology Solutions to make a bid.
Legal sources have said that valuation of Satyam could take a beating with only a few bidders remaining in the fray. The IT firm has not reported its earnings since October.
In January, Satyam’s founder chairman B Ramalinga Raju shocked India with his confessions that records and accounts of the company were doctored for several years.