March 24, 2009, 4:24 PM — Satyam Computer Services plans to finalize a buyer for a majority stake in the company by April 30, its board said in a filing on Tuesday to the Indian market regulator.
In a letter to the Securities and Exchange Board of India (SEBI), the board also said that it had decided that the buyer's stake would have a lock-in period of three years.
The buyer will also have to retain 100 key designated employees of the company for 12 months and will not be allowed to sell any of the company's material assets or undertaking for two years, the board said.
The government-nominated board was appointed in January after a financial scandal was unearthed at the company.
Satyam announced earlier this month a global competitive bidding process for a 51 percent stake in the company. While 31 percent of the stake will come from the preferential offer of new equity, in line with Indian regulations the winning bidder will have to make an open offer to other shareholders for the 20 percent balance.
Satyam was plunged into a crisis after its founder, B. Ramalinga Raju, said in January that the company's profits had been overstated for several years. The company's financials are as yet to be restated, which has been a major concern for bidders.
The U.N., a Satyam customer, has meanwhile said that it will not have further dealings with the company.
In a transcript on the U.N. Web site of a press briefing on Monday by Farhan Haq, associate spokesman for the U.N. secretary general, the spokesman is quoted as saying that "throughout the U.N. system we'd taken the decision not to have further dealings with Satyam." The current deals that had been previously made are all being wrapped up, Haq added.
The U.N. decision comes amid reports that Satyam is losing a number of its customers to other Indian outsourcers. The U.N. decision is the second confirmed loss of a customer after State Farm Insurance of the U.S. canceled its contract with Satyam.
