Satyam Computer Services has ended the registration process for bidders and expects to receive bids from interested parties by the end of this week.
SP Bharucha, the former chief justice of India, will oversee the selection process for a strategic investor, according to a statement from Satyam.
The Blackstone Group, The Carlyle Group and Kohlberg Kravis Roberts have been named by Indian media reports as potential bidders.
IT services conglomerate IGate Corporation has teamed up with a private equity firm to bid for Satyam, according to Bloomberg. The company will reportedly leverage the firm’s funding and legal expertise. It expects to submit a bid at less than INR45 a share ($0.87; €0.67) by the end of this week. IGate could not be reached for comment at press time.
Satyam, which is listed on the New York stock exchange, was trading at $1.58 per share at time of press. A year ago, it was trading at $22 per share.
“Today, if you just count all the liabilities as they are, it may be around $1.5 billion,” Phaneesh Murthy, chief executive of IGate, said in the report. The final price would be based on an estimate of Satyam’s sales, he added.
Reports that engineering services conglomerate Larsen & Toubro is tying up with private equity firms to bid for Satyam are “completely speculative”, according to a Larsen & Toubro spokesman. “There is no bid as yet. The only thing we have registered is an expression of interest. Whether or not a bid is submitted will be determined by the quality and quantity of information available from Satyam’s board,” the spokesman said.
Larsen & Toubro holds a 12 percent stake in Satyam. It acquired a 4 percent stake in December 2008, followed by 8 percent in Jan 2009.
Satyam is reeling from the effects of financial fraud which surfaced this January when Ramalinga Raju, founder and chairman of the company, disclosed that he falsified the company’s accounts and overstated cash and bank balances by approximately $1.4 billion. After Raju’s resignation in the same month, the Indian government nominated a board of directors and Satyam is presently a government-administered company.
A KKR spokesman declined to comment. Carlyle did not reply to requests for comment at press time. Blackstone could not be reached.