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Satyam gets takeover offers from Indian, foreign firms

January 20, 2009 15:42 IST
Last Updated: January 20, 2009 19:11 IST

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Even as the scam-hit Satyam [Get Quote] struggles to get on with business, overseas and domestic IT companies have approached the Hyderabad-based firm for a possible takeover.

"Satyam has got enormous fixed assets, human resource and technology assets. So, it is a very strong company. The board has not yet discussed the issue of looking for a buyer... But I have to truthfully say we have been approached by potential buyers," Satyam's government-appointed director Tarun Das said on Tuesday.

Asked if the buyers were MNCs or big Indian IT companies, Das said, "Both." The suitors are, however, not among the top IT companies of India, he clarified.

Analysts pointed out that if top IT companies have not approached Satyam, then it is possible that the suitors are not looking at Satyam as a whole for a buy-out, but only certain business or segments of the company. There have been unconfirmed reports that the company might soon appoint investment bankers to advise on a merger or sale.

Earlier, another board member Deepak Parekh had said the option of merger was always open for the company.

Das said the company is focussing on keeping the business running and, in that context, the appointment of CEO and CFO "are high priorities for the board"  which is meeting for two days this week to discuss all these issues.

"The new board was appointed 10 days ago and it has already met twice. We are again meeting on January 22 and 23 in Hyderabad and the priority is to keep the company going, to look after and retain the customers and employees."

The six-member board, appointed by the government to run the firm after founder Ramalinga Raju shocking disclosure, last met on January 17

"The board is reaching out to the clients, having conference calls with them at the board level. We are in touch with customers. Clients are reported to be concerned, naturally. We are reaching out to them to assure them as we have excellent people, engineers, technology to service them," he said.

The two-day board meeting will also discuss issues regarding liquidity.

"We are in touch with the banks... to help out and we have got a good response there. We are in touch with the employees to understand the business, organisation better. We met some of them on Saturday and we will meet more this week." The board would also discuss whether it needs to ask the government to stand as a guarantor for raising loans, he said.

"We have looked at the legal issues which the company faces because of the class actions suits filed in America and have appointed legal advisors to deal with that," he said.

Satyam's bankers are Citi and BNP Paribas.

Satyam, till recently counted among India's top four software services exporter, plunged into a crisis after founder Ramalinga Raju resigned as chairman earlier this month, revealing that profits had been falsified for years and that the $ 1 billion cash shown in the books did not exist.

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