Paving the way for bringing in a new owner at Satyam Computer Services, the Company Law Board on Thursday allowed the distressed IT firm to conduct a public auction for inducting a strategic investor and to raise its equity base.
After hearing a petition filed by Satyam on Wednesday, CLB ordered that the company could conduct an open transparent auction process for inducting a strategic investor.
CLB also authorised the company's government-appointed board for making allotment of preferential shares and raise its equity capital by 50 per cent from Rs 160 crore (Rs 1.60 billion) to Rs 240 crore (Rs 2.40 billion). The authorised equity capital of the company, whose shares have a face value of Rs 2 each, would increase to 120 crore (1.20 billion) from 80 crore (800 million), currently.
Seeking to expedite the process of its sale, Satyam on Wendesday sought CLB's permission to conduct a public auction for induction of a strategic investor and get the funds needed to ensure its uninterrupted operations.
The company also warned that many of its key clients and staff have threatened to quit due to the firm's financial troubles and therefore, it urgently needed fresh capital.
Those having evinced interest in acquiring Satyam include engineering major L&T, B K Modi Group and Hindujas.