The government-appointed board of the troubled Satyam Computer Services formally presented to the regulators the bidding process for selling a majority stake on Tuesday.
It formally apprised the Securities and Exchange Board of India and stock exchanges (including the US Securities Exchange Commission), listing its conditions for the bidders. The board is likely to finalise the bidder by April 30.
The Satyam board has said that corporate governance, a clean record, management and organisational ability in operating a global company will be considered, apart from the financial bid and other technical criteria. The bidders will furnish an irrevocable and unconditional performance bank guarantee of Rs 100 crore (Rs 1 billion) to guarantee the deposit of funds required for the preferential allotment and the requisite escrow amounts for the public offer within four days of being selected.
The board, in consultation with Justice S P Bharucha, will shortlist qualified bidders. The successful bidder has to deposit the total acquisition funds within four days of being selected. If it fails to do so, it will be removed from the process and the next highest bidder declared successful.
The bidder should, if it becomes the new promoter, agree to cooperate with the regulators, adjudicatory bodies or investigation agencies for the smooth conduct of the probe against the previous promoters or directors. It should not discontinue the main business of Satyam or undertake any new business unrelated to the existing business of the company during the pendency of the Company Petition-I of 2009.
It will be responsible for payment of fees and out-of-pocket expenses of Goldman Sachs and Avendus Capital and reasonable legal costs incurred by them, according to engagement letters.
Indian players Larsen & Toubro, the Spice group and Tech Mahindra have independently confirmed that they have completed the second round of the bidding process.
Global majors like IBM are also understood to have entered the second round, but this could not be independently confirmed. The Satyam board has also not clarified the position. Other names floating around include that of some PE firms. Television reports, however, maintain that PE firms like KKR, Texas Pacific Group and Barings have pulled out.
Satyam freshers seek compensation
Satyam freshers are seeking compensation from the firm for keeping them waiting for one full year and not honouring their job offer letters. A member of the Satyam Freshers' Union said they will seek suggestions on legal recourse. The Satyam management has told them it can't hire them in view of the economic downturn.