Tech M to announce open offer for Satyam today

Tech Mahindra, which deposited the money for the acquisition of Satyam Computer Services Limited, will announce the mandatory public offer for a 20 per cent stake in the beleaguered IT firm on Tuesday.

Tech Mahindra chairman Anand  Mahindra said all the financial resources required for the acquisition were raised through the local markets and non-banking  financial companies, apart from internal resources and the issue of non-convertible bonds, commercial papers and receivables.

The IT arm of Mahindra and Mahindra, which emerged as the successful bidder for a controlling stake in Satyam, on Monday deposited the initial subscription amount of Rs 1,756 crore (Rs 17.56 billion) and  an additional Rs 1,154 crore (Rs 11.54 billion) necessary to consummate the mandatory public offer in separate escrow accounts.

"All this was done in a record 72 hours, which shows the world that the Indian financial market has huge depth," he said.

Anand Mahindra, accompanied by senior executives of the Mahindra Group and Tech Mahindra, met the government-appointed members of the Satyam board and the company's key executives in Hyderabad on Monday to finalise plans for Tech Mahindra's acquisition of Satyam and discuss important transition issues.

Following the meeting, Vineet Nayyar, Tech Mahindra's vice-chairman and managing director, told reporters that the Hyderabad-based IT firm "will continue as an independent entity for the foreseeable future and its leadership will also continue to drive operations."

In this context, he said he spoke to Satyam CEO A S Murty and president Ram Mynampati, who agreed to continue in the company.

The new management's first priority will be to bring Satyam back to financial health. On the possibility of layoffs and cost-cutting, Nayyar said, "Now I can't say anything. The company has to be viable and we will work at it. Layoffs will be the last option."

The immediate priorities, according to Nayyar, include retaining current customers and winning back business lost as a result of the crisis, retaining key associates, winning new businesses and exploring the best ways to realise operational and structural synergies between the two companies.

The Tech Mahindra nominees will be appointed to the Satyam board after the initial allotment of shares is complete, and will focus on appointing a chief financial officer and look at strengthening corporate governance besides meeting customers and Satyamites at major locations worldwide.

Stating that an integration team is already in place, Nayyar said the company will have a new CFO in the next few weeks.

The core Tech Mahindra nominees to the Satyam board -- Vineet Nayyar, C P Gurnani, Sanjay Kalra and Ulhas Yargop -- attended Monday's board meeting as special invitees. They were not inducted into the board as the regulatory procedure was still on.

Anand Mahindra said there was a palpable sense that Satyam is going to be a very viable company. "I don't believe that this is a sinking ship. It may not be a racing craft yet, but we are well on our way to have a viable future," he said.

"We had a rewarding and fruitful interaction today with the top 500 leadership of Satyam and webcast and telecast through internal television to reach out to 22,000 associates across continents. The response from them was gratifying and outstanding," Mahindra said.

Nayyar said British Telecom, which holds 30 per cent in Tech Mahindra, had fully endorsed the Satyam acquisition deal and was enthusiastic about it as it expects Satyam's competencies to offer Tech Mahindra a great opportunity in other verticals as well.

On honouring the freshers' offers, he said Tech Mahindra will look into this issue as soon as they become a part of the company. On the liabilities, he remarked: "We haven't yet got into the details of the class-action law suits. We hope that they are defendable and we will do it."