Monday April 13, 06:00 AM
Sale of scandal-tainted Satyam enters last lap
NEW DELHI (AFP) - Bids will be opened for India's Satyam Computer Services in a sale aimed at giving the scandal-shaken outsourcing giant a capital injection and a fresh beginning, officials said.
Indian engineering heavyweight Larsen & Toubro has already built up a 12 percent stake in Satyam and is seen as a potential front runner for the company at the heart of India's biggest-ever accounting fraud.
Others that may be in the race for the company, once India's fourth-largest outsourcer by revenues, are Indian telecom software firm Tech Mahindra Ltd, US billionaire investor W.L. Ross and Cognizant Technology Solutions.
"The bids will be seen Monday," Satyam board chairman Kiran Karnik told reporters on the weekend. There has been no official comment on the identity of the bidders.
The government-appointed board, advised by investment bankers Avendus and Goldman Sachs, is expected to announce the highest bid for Satyam later Monday in a statement.
The board has said it wants a buyer which has a viable operating plan for Satyam.
The government named a new board to take charge of Satyam after its founder B. Ramalinga Raju said he had created a false bank balance of over one billion dollars and had inflated profits.
The board retains the right to reject the bids if it deems them too low. Government approval will be needed for the highest bidder's offer to be accepted.
The sale has taken on an urgency, with dozens of clients reported to have terminated their contracts or be planning to defect to Satyam's rivals because of uncertainty over the company's future.
Just a few contenders are believed to be interested in Satyam because of deep uncertainty over its accounts and worries about liabilities from US shareholder and other suits.
The accounts are still being restated and it is not known when they will be ready.
Satyam has been scrambling to pay salaries and other expenses and needs a cash infusion to help stay afloat.
It operates in close to 70 countries and has nearly 700 clients, including about 185 Fortune 500 firms such as Nestle SA, which normally would make it an attractive bid target.
But potential bidders have found it hard to put a price on the Hyderabad-based firm due to the incomplete financial data. The company has been valued at up to 500 million dollars, according to media reports.
Raju, his brother and seven other people, including two Price Waterhouse auditors, are now in jail on charges of conspiracy, cheating, forgery and falsification of accounts.
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