Satyam is battling for survival
INDIA’S fraud-rocked Satyam Computer Services 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 emerges.
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 and fudged its profits for years.
The government-appointed board is poised to seek bidders shortly, Satyam chairman Kiran Karnik said, despite the fact that auditors have said it may take six months to have a complete picture of the company’s finances.
“We hope the invitation for expressions of interest (from bidders) can go in a few days,” Karnik told reporters yesterday.
“Restatement of the accounts may take time” and will not be done in time for the bidding process, he said.
Bidders will have to go on such information as Satyam’s client list and order book but enough should be known for them to make a “reasonable” assessment of its finances, he said.
The sale of India’s fourth-largest software services exporter has taken on a sense of urgency with client uncertainty reportedly mounting over the company’s future following India’s biggest ever corporate fraud.
Satyam, which has already launched a drastic cost-cutting drive to see it through the global downturn and its own financial woes, is said to have lost several leading clients and more are reported to be mulling such a move.
The company, which declines to comment on client losses, citing customer confidentiality, has said it is facing financial trouble and needs an injection of funds from an investor.
“There’s no question there’s a risk of clients deserting,” Harit Shah, IT analyst at Angel Broking, said.
The price for Satyam is expected to be calculated on the value of all the company’s assets, using such measures as its real estate, customer base and skilled workforce, analysts say. Buyers are expected to seek a majority stake.
Satyam operates in nearly 70 countries and has close to 700 clients including 185 firms ranked in the Fortune 500.
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