India’s Satyam Computer Services could have a new owner today when bids are opened for the disgraced outsourcing giant, officials said.
Sale of the firm at the heart of India’s biggest accounting fraud has taken on an urgency, with dozens of clients reported to have terminated their contracts or be aiming to shift their business because of uncertainty over Satyam’s future.
“The bids will be seen [on] Monday,” Satyam board chairman Kiran Karnik told reporters on Saturday.
The Satyam board, advised by investment bankers Avendus and Goldman Sachs, then expects to announce the winning bid for the company, which acts as the back office for some of the world’s biggest manufacturers, health care providers and banks.
“We very much expect it to be wrapped up [on] Monday unless there’s something we didn’t anticipate, but that’s unlikely,” said a person close to the bidding process, who did not wish to be named.
The government-appointed board took control of Satyam after its founder, B. Ramalinga Raju, stunned India’s corporate world in January by declaring he had inflated the balance sheet by over US$1 billion and overstated profits. Just a handful of players are believed to be in the race as a result of lack of clarity about Satyam’s accounts and worries over liabilities from US shareholder and other suits.
The accounts are still being restated and won’t be ready for months. But Satyam has been battling to pay wages and other expenses since the fraud was revealed and is desperately in need of a cash infusion to help it survive.
Indian engineering giant Larsen & Toubro has already built up a 12 percent stake in Satyam and is seen as a front runner for the firm, once India’s fourth-largest by revenues.
Others expected to be in the race are Indian telecoms software company Tech Mahindra Ltd and US billionaire investor W.L. Ross — possibly in tandem with Nasdaq-listed Cognizant Technology Solutions, media reports said. All have refused comment.