Satyam likely to ask for full bid amount in advance

The Satyam board, which is scheduled to meet on Monday to decide on the technical and financial bids for a 51% strategic stake in the beleaguered IT firm, is likely to ask the successful bidder to deposit in advance the money in an escrow account. According to government sources, even if a successful bidder emerges on Monday, the board would not announce its name. The board will, however, ask the successful bidder to deposit the bid amount for a 31% stake as well as the amount for the remaining 20% to be acquired later through an open offer.

Sources said before announcing the name, the board would intimate the government as the board is a government-appointed one and a final decision regarding the buyer needs to be taken in consultation with the government.

As the bidding process is on, the Satyam board and the top management, in an effort to assure major clients about the continuity in management and that their interests would be protected, held conference calls with key clients over the weekend.

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Larsen and Toubro, Mahindra, Spice in race for Satyam

Larsen & Toubro (L&T), Tech Mahindra and the Spice group on Thursday submitted expressions of interest (EoI) to participate in the bidding process to acquire a 51% stake in Satyam Computer Services. Another major contender, the Hinduja group, backed out from the bidding process for reasons it did not disclose. Capgemini, Europe’s largest computer consultancy, also said it has no interest in buying a stake in the troubled IT company. The deadline for submitting an EoI ended at 5 pm on Thursday.

Satyam’s government-appointed board is keen to bring in a majority investor to restore the confidence in the company of its 50,000-strong staff and more than 600 customers, which include General Electric and Qantas Airways. Though the company was hit by India’s biggest corporate scandal, its top clientele and staff talent are seen as attractive to potential bidders. However, the class action suits in the US still hang like a Damocles’ sword over the company, with estimated liabilities of $400 to $800 million, according to Spice group legal advisors.

The Satyam board is meeting on Friday in Hyderabad to scrutinise the EoIs.

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Satyam door opened to foreign bids: IBM, Oracle make queries

The government is keen to get a foreign suitor for Satyam. Minister for corporate affairs Prem Chand Gupta said in Hyderabad on Sunday the company’s government-appointed board has formally asked foreign companies to also bid.

While the minister did not disclose names, it is learnt that officials from IBM have met Satyam’s management team this month, to ascertain how long the restatement of accounts would take for the Indian firm. Oracle is also learnt to have sent some questionnaires to the Hyderabad-based IT company that imploded after its erstwhile chairman B Ramalinga Raju said he had engineered a Rs 7,800-crore accounting fraud in the firm.

The minister’s statement means the government is keen to get a very strong valuation for Satyam than was thought so far, with domestic engineering company L&T seen as the front runner. It already has a 12% stake in the IT company.

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Satyam names new Chief Executive Officer

The government-appointed interim board of Satyam Computer Services on Thursday selected AS Murty as CEO. Murty, who is currently chief delivery officer, has been with Satyam since 1994. He will draw an annual salary of Rs 5crore.

The six-member board also announced the appointment of Tata Chemicals former MD Homi Khusrokhan and Murugappa group former CFO Partho Datta as special advisors to the board. As Datta will oversee the company’s financial operations, the board decided not to appoint a separate CFO at this juncture.

In a statement issued after its two-day meeting, the board also confirmed a sanction of Rs 600 crore to meet the company’s working capital requirements.Satyam has been staring at an acute shortage of cash ever since the dramatic disclosure on January 7of a Rs 7,800-crore accounting fraud by Satyam founder B Ramalinga Raju.

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Hindujas join race for Satyam Computer

The number of suitors for the beleaguered Satyam Computer is increasing as Hinduja Global Solutions, an arm of the Hinduja Group, has evinced interest in acquiring the troubled IT company.

Company officials said that HGSL has sent a formal communication to Goldman Sachs, the newly-appointed investment banker for Satyam, saying that it is keen to participate in the bidding process as and when it starts.

The company has over$100 million in books and if required promoters Hindujas would also chip in, the officials said.

The Satyam board, which is meeting on February 5, is likely to take stock of such proposals.

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