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Satyam winner may be barred from selling assets
By siliconindia
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Monday, 16 March 2009, 19:54 IST |
1 Comments
New Delhi: The company which wins the bid for Satyam will not be able to sell the assets of the beleaguered IT firm for three years. The winning bidder is not supposed to pledge the acquired shares to raise debt, and has to keep away from immediate lay-off of the employees. Moreover, the bidder should have enough cash on hand to infuse immediately. These are some basic norms reportedly laid down by Satyam board for the winner of the bid.
These are the mainframe of the Requests-For-Proposal (RFP) among others that the Board sent to the registered bidders on Friday night.
Chairman of the Board Kiran Karnik said, "We have sent RFP to all the registered bidders. The board is taking all steps to do it (stake sale) as soon as possible...we are on track with our internal deadline." He refrained from revealing the time-line set by the board, though sources said deadline could be anytime in April.
At the same time bidders have started replying to RFP. Phaneesh Murthy, Chief of iGate, which announced its willingness to bid for Satyam, is in India presumably to see the process himself though the company said it is his routine visit.
According to a bidder, the Board has made it clear that the legal cases (and expenses) against Satyam (in the U.S.) will be the responsibility of the winner. The cost of the U.S. lawsuits, according to a bidder, could be between 400 million dollar and 700 million dollar.
A buyer is likely to be in place next month, said a source close to the development. The Satyam Board that met last week said it has received adequate response from Indian and international bidders, including PE firms.
The company has asked the potential bidders to formally respond to RFP by March 20, along with proof that their net worth was at least Rs 1,500 crore - one of the eligibility criteria for the bidders. Satyam said once this was done, interested bidders will be provided data and information regarding the company to enable them to submit technical and financial bids.
