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15 April 2024

Fraud-hit Satyam gets nod for stake sale

Satyam says it wants to find a buyer soon. (REUTERS)


Fraud-hit Indian outsourcing firm Satyam yesterday said it had been given the green light to open a global bidding process to sell off a 51 per cent stake in the company.

Satyam's government-appointed board said it would "initiate the process to invite expressions of interest" from bidders very shortly, a statement said.

Satyam has been battling for survival since January when its founder B Ramalinga Raju, now in jail, stunned the corporate world by declaring he inflated the firm's balance sheet by more than $1 billion (Dh3.67bn) and fudged its profits for years.

Company shares surged 15.81 per cent or Rs5.5 (Dh0.41) to 40.65 in morning trade yesterday on the Mumbai stock exchange.

Satyam says it wants to find a buyer soon – even though it could be months before the full truth about the disgraced outsourcing giant's finances emerge.

Market regulator the Securities and Exchange Board of India has approved the sale of the stake in two phases.

The buyer would first acquire newly issued shares of the company representing 31 percent of its share capital.

The purchaser would then make a public open offer, mandatory under financial market regulations, to acquire another 20 per cent of the firm, the statement said, raising its total stake in Satyam to 51 per cent.

"Qualified investors are expected to have total net assets in excess of $150 million (Dh550.5m)," the statement said.

In line with Indian law, a lock-in period of three years will prevent the investor from selling these acquired shares, the regulator said in the statement.