BANGALORE (Reuters) – Satyam Computer Services Ltd (SATY.BO) hopes to finalise the buyer of a 51 percent stake by April 30, the fraud-hit Indian outsourcing company said in a filing to the market regulator on Tuesday.
As part of the terms of the takeover transaction, Satyam said the buyer’s shareholding, acquired through a preferential allotment of shares and open offer to public, would have a lock-in period of three years. The successful bidder will also not be allowed to sell any material assets of the firm for two years from the completion of the open offer, unless shareholders approval is obtained, Satyam said in a filing to the Securities and Exchange Board of India.
Satyam said potential bidders, who had submitted a detailed expression of interest by March 20, should expect to receive a response by Wednesday, and selected bidders would be invited for a due diligence process. Indian engineering firm Larsen & Toubro (LART.BO), IT services firm Tech Mahindra (TEML.BO) and diversified Spice Group are among firms seen an potential suitors for Satyam, whose government-appointed board is looking for a buyer to revive the company.
New York-listed Satyam (SAY.N) has been struggling since founder and Chairman Ramalinga Raju shocked investors in January, saying profits had been overstated for years and assets falsified in what has become India’s biggest corporate scandal.
In the filing, Satyam said the buyer could not discontinue the main business of the outsourcer and would have retain up to 100 key staff for a period of one year. The new promoter would also have to agree to cooperate with regulators and investigative agencies on investigations into mismanagement and fraud charges against the previous promoters or directors, it said. The successful bidder will also be responsible for paying fees and “out of pocket expenses” of Goldman Sachs and Avendus Capital, the two investment bankers appointed by the Satyam board to find a strategic investor.
The due diligence exercise will be done through access to data containing “certain non-public information” about the company and the management will provide an overview of the current vision, strategy and operations, it said. (Reporting by Sumeet Chatterjee; Editing by John Mair)