Tech Mahindra, L&T vie for Satyam

CIOL Bureau
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MUMBAI, INDIA: Infrastructure major Larsen and Toubro (L and amp;T), which already holds 12 percent in the Hyderabad-based IT major Satyam, and Mahindra and Mahindra's IT arm Tech Mahindra were among the bidders to register interest on Thursday in acquiring a 51-percent stake in scam-hit Satyam Computer Services.


'In line with the process set out by the board of Satyam Computer Services, Tech Mahindra, on March 12, 2009, registered its interest in participating in the bidding process. Once the company has received the RFP (request for proposal) and other information it will evaluate and conclude next steps,' the firm said in a statement.

Satyam had on Monday invited registrations to start the process to sell 51-percent majority stake in the company by way of a global auction after India's market regulator gave it the go-ahead last week to do so.

Thursday was the last day for registering interest in the bidding.


The B K. Modi-controlled Spice Group is among the contenders, while the Hinduja Group, which expressed interest earlier, has not yet firmed up its plans.

The Securities and Exchange Board of India (SEBI) had given its permission on Friday to Satyam to facilitate a global competitive bidding process so as to sell the majority stake to an investor.

As part of the process, each interested bidder will be sent a request for proposal shortly after March 12 and asked to submit a detailed expression of interest together with the proof of availability of funds of at least Rs.15 billion ($290 million).


Thereafter, based on submitted expression of interest, eligible bidders will be short-listed and given access to business, financial and legal diligence materials relating to the software bellwether hit by a Rs.78 billion ($1.5 billion) fraud perpetrated by its founder and former chairman B. Ramalinga Raju.

The government-nominated board of the software major would select the successful bidder after evaluation of all bids with the successful bidder being given four days to deposit with the company the entire subscription amount and the requisite funds for the public offer in an escrow account.

Satyam had last week laid out a three-step process for interested bidders, starting with the subscription of newly issued equity shares, representing 31 percent of the company's share capital.


After this, the investor will have to make a mandatory minimum open public offer to purchase a minimum of 20 percent of the company's share capital, as per the relaxed takeover norms prescribed by the markets regulator.

Once the offer period closes and the stake acquired is less than 51 percent, the investor will get the right to subscribe to additional newly issued equity such that the resultant share is 51 percent.

Source: India PR Wire