Satyam Board Appoints Goldman Sachs & Avendus as Investment Bankers
Hyderabad, INDIA, January 27, 2009: Satyam Computer Services Limited (NYSE: SAY) today announced key decisions at its Board meeting on 27th January, 2009, in Hyderabad.
Today’s board meeting – the fourth since its reconstitution on 10th Jan 09 – was chaired by Mr. Manoharan. The Board had earlier met on 26th Jan 2009, for over three hours.
The Board has appointed Boston Consulting Group as Management Advisors to support the Directors and the Satyam Leadership team. A dedicated 3 member senior team from BCG is expected to work closely during this revival process. “An important point to note is that they will not be charging Satyam any fees for their services and this reflects on their commitment to the task on hand” Mr. Parekh stated.
The board today said it had concluded most of the discussions relating to the financing requirements of the company. These funds will help tide over the immediate, compelling operational expenses.
The company reaffirmed that the salaries for January 2009 will be paid, as scheduled and that this would be achieved from its internal accruals / receivables. Further validations have been done relating to the employee numbers of Satyam Computer Services Ltd., and there are sufficient data points to reinforce the understanding that the earlier reported numbers hold good.
The proposed Management structure was further discussed and a formal statement reflecting the plan of action will be released this week.
The board has announced the appointment of Goldman Sachs and Avendus as Investment bankers to advise the company on the way forward and to explore various strategic options.
The various options under consideration include :
a. Identifying strategic investors
b. Obtaining expressions of Interest and
c. Ensuring a fair, transparent approach to the entire process
Commenting on the move, Mr. Manoharan said “The Board has received several proposals from Corporate entities as well as from select PE firms. Some have shown interest in evaluating Satyam as an integrated entity, while others have expressed interest in portions of Satyam’s business. A sale of ‘parts’ of Satyam at this stage would be contrary to the mandate of regulating the affairs of Satyam as a going concern, as stipulated by the Government of India. It is therefore not an option that is being evaluated currently”
Responding to the move by a corporate entity to acquire large portions of Satyam shares in the open market, Mr. Manoharan said “The reasons for the same are best explained by the purchaser. It should not be taken as an indication of support by the Government nominated Board, for change of control of Satyam, at this stage. Appropriate, fair and transparent measures for enabling open bids will be devised by the company’s Board in consultation with SEBI and the Government of India, since adequate number of bidding interests have been evinced to the new Board. It is important to keep in view that this is now a Government administered company, reporting to the Company Law Board and the Ministry of Corporate Affairs.”
Speaking on customers, Mr. Kiran Karnik said “I have been talking to quite a few customers and partners, every day. It is heartening to note that they continue to engage with us, confidently. While a few are discussing risk mitigation plans, they are closely monitoring and wanting to see Satyam’s return to long term sustainability. We have been assured by the actions of some of our key customers, who have sent strong messages to other vendors, to refrain from poaching Satyam’s associates or business. There is also a steady improvement in the Statement of Work (SoW) extensions. We continue to reach out to our customers, where required, to reassure them at every stage”
“All these actions reflect the sense of urgency and determination and these steps will help restore stakeholder confidence, ensure stability and growth and bring back the glory that the Satyamites truly deserve” said Mr. Manoharan, who chaired today’s meeting.
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