Mumbai: Satyam Computer Services will submit a plan to pick a strategic investor to regulators next week, and said on Saturday it had won work worth more than $250 million since it was hit by the country’s biggest corporate fraud last month.
Chairperson Kiran Karnik said Satyam's revival was "on a fast-track mode", and another board member said banks were now approaching the company to offer funding.
"The board today approved the process to be followed for inviting a strategic investor and decided to seek regulatory approvals early next week," board member Deepak Parekh said in a statement on Saturday.
Parekh said the process would be detailed once it had regulatory approval. The government-appointed board is being advised by Goldman Sachs and Indian investment bank Avendus Advisors in its search for a strategic investor.
On Thursday, Satyam won approval from the Company Law Board (CLB) to increase its authorised share base and bring on board a strategic investor through a competitive auction, with the option to also make a preferential issue of shares.
The CLB said Satyam could raise its authorised share capital to 1.4 billion from 800 million, which could allow the board to sell a majority stake to an investor as Satyam's latest annual report showed it had 670.5 million shares on issue.
Potential suitors that have declared an interest include India's top engineering and construction firm Larsen & Toubro, Spice Group and the Hinduja Group. Satyam, India's fourth-largest software exporter, has been battling for survival since January 7 when its founder and chairman Ramalinga Raju quit, revealing that profits had been overstated for years and assets falsified. Raju is in jail.
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CEO A.S. Murty, appointed earlier this month, said the outsourcing firm had won new purchase orders and work extensions worth over $250 million since January 7.
"More than half of this value comes from new purchase orders, which reinforces the confidence that customers have been sharing with us in our discussions," he said in the statement.
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The Economic Times reported on Saturday that Satyam had lost a $100 million contract with Coca Cola Co and a $35 million contract with GLaxoSmithKline.
When asked about the report, a Satyam spokeswoman said the company did not talk about individual clients. Board member T N Manoharan said Satyam was using bank funding to meet immediate and near-term operating requirements, including payments to vendors.
Earlier this month, the board said it had secured bank funding of $6 billion rupees ($120 million). "The good news is that we are receiving unsolicited offers from banks for funding," Manoharan said in the statement.
The board also recommended the removal of former auditors Price Waterhouse, adding the auditing firm had tendered its resignation, and would appoint new auditors. In January, the board appointed KPMG and Deloitte to restate its accounts. Chairman Kiran Karnik has said the sale process could begin before the restated accounts were released.
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