Suitors queue up for Satyam

New Delhi, Jan. 20 The beleaguered IT company, Satyam Computer Services has been approached by “potential buyers”, both MNC and Indian, according to its newly appointed board member Mr Tarun Das.

“We have been approached by both MNCs and Indian IT companies,” Mr Das told mediapersons here. Asked if the top-rung IT companies too were in the race to acquire the Hyderabad-based service provider, Mr Das said “no”.

One such suitor, Essar group company Aegis BPO, has already submitted an Expression of Interest (EoI), for taking over the BPO business of the crisis-ridden Satyam, which has been tottering under Rs 7,000-crore financial fraud authored by its disgraced promoter Mr Ramalinga Raju.

When contacted, Aegis BPO’s Chief Executive Officer, Mr Aparup Sengupta, confirmed that the company had put in an EoI last week to expand the footprint of its BPO business but declined to comment on specifics.

However, sources pointed out that Aegis had only submitted an EoI, and not an ‘offer’. “In any company, there are a set of clients who are being served by professionals. It makes economic sense if this (operation) comes to Aegis. However, Aegis BPO is yet to hear from the Satyam board,” sources said adding that “an offer can only be made after gaining access and doing a thorough due diligence of the BPO operations.” They also said it was too early to talk valuation but noted that the deal could be funded by “internal resources”.

In August last year, Aegis BPO had decided to buy the Nasdaq-listed off-shoring firm PeopleSupport Inc for $250 million (Rs 1,057 crore), marking its eleventh acquisition over the last four years. Aegis, which is currently on a $450- million revenue run-rate, employs 30,000 professionals spread across India, the Philippines, the US, Costa Rica and Africa. The company’s BPO business spans domains such as telecom, banking, financial services, insurance and healthcare.

Satyam BPO, on the other hand, has 3,500-odd employees and counts marquee names such as Verizon and GlaxoSmithKline as its clientele.

L&T stake


Even as the buzz around the suitors lining up for Satyam gets louder, Larsen and Toubro’s chief, Mr A.M. Naik, on Tuesday met the Corporate Affairs Secretary, Mr Anurag Goel, and is learnt to have discussed the company’s stake in Satyam. Sources said L&T – which holds about four per cent stake in Satyam – is worried about its stake and is looking to safeguard its interests.

Board meeting


The much-awaited board meeting of Satyam has now been advanced by a day to Thursday and the venue too has been shifted to Hyderabad from Mumbai.

“The board meeting is likely to be spread over two days,” a Satyam board member said.

The six-member board is expected to discuss the critical issue of CEO and CFO appointments, and issues relating to cash requirements including salaries and outstanding dues (estimated at nearly Rs 800 crore for January).

Among the immediate concerns for Satyam is the possible flight of customers.

Leading Indian IT companies, including Infosys and TCS, have stated that they have been approached by Satyam’s clients for taking over projects.

However, some clients including GE and Malaysia Airlines seem to be holding on for now.

“GE continues to use Satyam Computer Services for services. We have not moved any work,” a GE spokesperson said.

The Malaysia Airlines General Manager, Transition Management, Mr En Salleh Tabrani, said, “Satyam provides Malaysia Airlines with onsite professional services. We have been in discussions with Satyam and have been advised that the services will continue as usual. At the same time, we are also looking at options should there be any disruption to the services provided.”