L&T, Essar approach Satyam

NEW DELHI: There seems to be light at the end of the tunnel for the fraud-ridden Satyam Computer Services with two leading corporates — Larsen & Toubro and Essar — showing interest in buying whole or part of the Hyderabad-based IT major, it is understood.

Without identifying the buyers, CII mentor and director on the Satyam board Tarun Das confirmed on Tuesday that there were buyout offers from domestic and foreign companies.

During the day, L&T chief A.M. Naik met Corporate Affairs Minister Prem Chand Gupta on the Satyam fiasco even as the Essar group submitted a proposal for buyout of the BPO arm of the crisis-hit IT company.

Both companies already have interest in Satyam. While L&T has recently bought a little over four per cent stake in the company, the engineering major is also into IT business through L&T Infotech. The Ruias-promoted Essar is also in IT-related business through its outsourcing firm, Aegis.

After his meeting with Mr. Gupta and Corporate Affairs Secretary Anurag Goel here, Mr. Naik merely expressed concern over L&T’s investment in Satyam and did not divulge further details. Apparently, L&T is willing to explore all available options to safeguard its interest and it is too early to take a final decision.

“No comments,” said an L&T spokesperson when he was asked about the company’s interest in Satyam. To a question whether the company was looking for a strategic fit in Satyam, he said: “We have a portfolio investment through L&T Capital.”

According to sources, Essar has submitted a proposal by way of expression of interest (EoI) in Satyam’s BPO business.

It is learnt the Satyam board could soon appoint investment bankers for advice on sale or merger.

“Satyam has enormous fixed assets, human resource and technology assets. So, it is a very strong company. The board has not yet discussed the issue of looking for a buyer... But I have to truthfully say, we have been approached by potential buyers,” Mr. Das said.

Asked if the prospective buyers were multinationals or big Indian IT companies, he said: “both.”

HDFC Chairman and Satyam board member Deepak Parekh had also said the merger option was always open.

Mr. Das said Satyam was focussed on keeping its business running and, in that context, the appointments of a CEO and a CFO “are high priorities for the board,” which is meeting for two days this week to thrash out all these issues.