Satyam to Sell Majority Stake in Global Bid
Indian outsourcer, Satyam Computer Services, said Friday that it has received permission from regulators to sell a 51 percent stake in the company in a global bidding process.
Bidders will not, however, have access to detailed company accounting books because they are being restated following a disclosure in January by the company's co-founder, B. Ramalinga Raju, that profits had been over-stated for several years.
They may also not have access to details about the company's customers because that is considered competitive information.
The precise details of the competitive bidding process and the information that will be made available to investors will be announced later, a Satyam spokeswoman said.
Some investors have said that they will not participate in a bid if all the financial information is not available to them.
The Indian government superseded Satyam's board and nominated new members to the board to run the company in January, after the financial scandal and a working capital crunch threatened day-to-day operations.
The Indian government's Company Law Board (CLB) in February authorized the new board to increase the share capital of Satyam, and to issue equity preferentially to a strategic investor who will bring in management expertise.
An issue of new capital usually requires shareholder approval under Indian law, which the company's board wanted to avoid to save time, it said in a submission to the CLB.
Under a scheme approved by the Securities and Exchange Board of India (SEBI) this week, the winner of the bid will initially acquire 31 percent of the share capital of Satyam through a new issue of capital.
In the second stage, the investor will have to make an open offer to other Satyam shareholders to purchase from them a minimum of 20 percent of the company's share capital, according to regulations. The open offer will be made at the same price as that paid by the investor in the first stage, according to SEBI.
Qualified investors are expected to have total net assets in excess of US$150 million, Satyam said.