Satyam is cash surplus again

Company clears salaries, most of its pending bills.

Chennai, April 2 With prospective buyers set to make their bids, Satyam Computer, which was struggling to even meet its January salary bill, now reports a small cash surplus. This is after accounting for all its liabilities including salaries and supplier payments, according to a top official who preferred to be anonymous.

The company has managed its operations with collections of over Rs 2,000 crore from customers in the last three months or an average of Rs 700 crore a month. When Mr Ramalinga Raju went public with his “confession” on January 7, the company had receivables of a little over Rs 1,700 crore, all of which has been recovered in the period since, said the official.

After payment of salaries, Satyam was left with surplus cash of over Rs 450 crore in February. This includes the Rs 300-crore loan it borrowed that month, which it used to repay old loans and also meet forex losses from prior hedging contracts.

Satyam is understood to have been sanctioned a further Rs 385-crore loan from two different banks, which it has not availed itself of yet.

Clearing liabilities


The official said that given the healthy cash situation, Satyam discharged most of its liabilities for pending bills, including supplier and vendor payments, in March. Vendors are understood to have opted to take cash immediately in return for small discounts of up to 10 per cent on their pending bills.

The company spent almost Rs 1,000 crore in March to meet its salary and other obligations pending since January. Almost the entire money was spent from internal accruals over the last three months, leaving it with about Rs 200 crore cash as of April 1.

Staff Attrition


The official said that the company faced an employee attrition of 10-15 per cent in the last three months, which he termed as “on par with industry average.” The total employee count now is around 47,000 with Satyam alone having around 43,000 employees on its rolls, he said.

He also confirmed that some customers have moved away since January but said that they would account for “no more than 10-15 per cent in revenues”. The official attributed the delay in restatement of accounts to the laborious process of getting confirmations from over 135 bank accounts that the company held worldwide and from global customers, all for the last seven years