Satyam bidding process started last week where request for proposal was sent to many companies who have shown interest in taking over Satyam. Few of these names were - L&T, Spice Group, iGate, Hinduja group and also IBM, HP names were mentioned.
Due to ambiguity of pending class action suits, its impact and current financial situation of company, IBM and HP didn't even proceeded further while iGate and now Hinduja have stepped out of race. It leaves only two front runners - L&T and Spice Group. Both have shown a strong interest as it would be strategically a big step for any of them to acquire a large IT service provider company with presence in more than 50 countries and a good skilled resource base of more than 40,000.
On morning of 23rd March 09 L&T and Spice group have been selected for second phase of bidding. It has not been disclosed who else has qualified or have bid for Satyam. There are expected to be seven players who are shortlisted for second stage of bidding which may show Tech Mehindra also in race..
iGate has issues a statement before that its bidding price will be much lower than current market price. Typical market sentiements are also in line with this feeling and from the time bidding process has started, Satyam share is slidding down on Indian stock exchange. Today it has already gone down by 2.7% of its previous close 43.9 to 42.7 and still going low.
It is expected that Satyam share might trade in range of 30-40 this week because of high risk invovle in this bidding process (for company who will buy Satyam). Rating agency Fitch withdrew its AAA rating for Tech Mahindra citing the risks involved in bidding for the software company
24th March 2009
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Seems like Modi, Spice group chairman, is not happy how things are panned in Satyam bidding process. Name of all players are not revealed and goign forward news are not in public.
Also for bidders now there are mixed news in market. Business standard has reported that there are six bidders and not seven which may include IBM, HP and KKR Private equity investors.
Watch out this space for more news on Satyam Bidding. Please leave your comments on what you think will be share price for bidding and who will be the ONE.
Showing posts with label Satyam. Show all posts
Showing posts with label Satyam. Show all posts
Sunday, March 22, 2009
Wednesday, January 7, 2009
Fate of Satyam after Raju Resigns
This is today’s shocking and hot news for India. Chairman B. Ramalinga Raju’s admission that Satyam Computer Services Ltd’s Balance Sheet was completely fabricated got the stock
Crashing down by 66.5 per cent to Rs 40 from Wednesday’s high of Rs 188.70 (check here)
Company share hit a lowest of Rs 30, while previous 52 week low was marked at 114, as details of the extent of fraud perpetrated by the promoters shook the stock market.
Not only the prices of own company share but this news has brought down the whole Sensex. The BSE IT Index plunged 7.70 per cent and BSE Realty tumbled 11.20 per cent.
Satyam fraud raised question over corporate governance of other companies also, especially IT. The Satyam fiasco has left a big question mark on corporate governance in India while sending a negative signal to the foreign institutional investors, analysts said. Company was already in news for bad governance over decision to invest in family business and 8 year ban from World Bank. Check my previous post on this topic.
The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.
Chairman’s letter to the company board and SEBI revealed a fraud of unprecedented proportions. Raju stated that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
The Securities and Exchange Board of India on Wednesday said it would take all steps under the law for which it has started discussions with government and bourses. As Raju mentioned in his letter that neither he nor managing director have been benefited from this and it is a result of inflated profits company was showing over the past few years (source unknown, and I am not responsible for validity of this statement).
There may not be much impact on the other IT companies, except a bad name in general for Indian corporate and one may see Infosys, Wipro or TCS go up in next trading sessions. Companies in competition of Satyam overseas can look it as opportunity as management will take some time to get hold on company and it may not pursue its growth that aggressively like it was doing before. It can act as advantage for Satyam’s competitors.
Crashing down by 66.5 per cent to Rs 40 from Wednesday’s high of Rs 188.70 (check here)
Company share hit a lowest of Rs 30, while previous 52 week low was marked at 114, as details of the extent of fraud perpetrated by the promoters shook the stock market.
Not only the prices of own company share but this news has brought down the whole Sensex. The BSE IT Index plunged 7.70 per cent and BSE Realty tumbled 11.20 per cent.
Satyam fraud raised question over corporate governance of other companies also, especially IT. The Satyam fiasco has left a big question mark on corporate governance in India while sending a negative signal to the foreign institutional investors, analysts said. Company was already in news for bad governance over decision to invest in family business and 8 year ban from World Bank. Check my previous post on this topic.
The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.
Chairman’s letter to the company board and SEBI revealed a fraud of unprecedented proportions. Raju stated that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books). Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
The Securities and Exchange Board of India on Wednesday said it would take all steps under the law for which it has started discussions with government and bourses. As Raju mentioned in his letter that neither he nor managing director have been benefited from this and it is a result of inflated profits company was showing over the past few years (source unknown, and I am not responsible for validity of this statement).
There may not be much impact on the other IT companies, except a bad name in general for Indian corporate and one may see Infosys, Wipro or TCS go up in next trading sessions. Companies in competition of Satyam overseas can look it as opportunity as management will take some time to get hold on company and it may not pursue its growth that aggressively like it was doing before. It can act as advantage for Satyam’s competitors.
Tuesday, December 30, 2008
Satyam - Going down or coming Up
With latest two blow to Satyam, it is expected that company would go down and so much that it may be hard to recover. If you don't know about these two blows, here are the details for you -
First Blow - Satyam decided to invest in real state companies to diversify and to de-risk company asset. Unfortunately these real state companies, Maytas Infrastructure and Maytas Properties, were owned by family member of its main promoter Raju and were not doing very good in market.
Second Blow - World bank posed a 8 year ban on Satyam. Ban was meted out for "improper benefits to bank staff" and "lack of documentation on invoices".
Satyam share plunged down to 50% after these. 4 of its director resigned, few taking moral responsibility of supporting its decision and its board of director strength reduced to 6. It actually worked positively for Satyam as few of wrong doers were going away. Even chances of somebody buying Satyam rose and so the share price of company.
Satyam has engaged DSP Merrill for analysing company's strategic move at this time and have promised stakeholders that all concerns for last two week incidents will be addressed in maltiple ways.
Even it announced that share of few of directors will come in market as those share have been financed by various lenders and so lender will sell those shares to cover margin. It will reduce stake of directors in company and a new identity could take over management if bought a good proportion from market. Thinking that new identity will be more desciplined then current directors, it has given company a better future possibility.
Satyam was surely a grwoing company and was having a strong place in IT service provider companies. If management really cares about company and proper corporate governance are put in place, it is no doubt that it will not only recover its position but also reach new levels. What do you think?
First Blow - Satyam decided to invest in real state companies to diversify and to de-risk company asset. Unfortunately these real state companies, Maytas Infrastructure and Maytas Properties, were owned by family member of its main promoter Raju and were not doing very good in market.
Second Blow - World bank posed a 8 year ban on Satyam. Ban was meted out for "improper benefits to bank staff" and "lack of documentation on invoices".
Satyam share plunged down to 50% after these. 4 of its director resigned, few taking moral responsibility of supporting its decision and its board of director strength reduced to 6. It actually worked positively for Satyam as few of wrong doers were going away. Even chances of somebody buying Satyam rose and so the share price of company.
Satyam has engaged DSP Merrill for analysing company's strategic move at this time and have promised stakeholders that all concerns for last two week incidents will be addressed in maltiple ways.
Even it announced that share of few of directors will come in market as those share have been financed by various lenders and so lender will sell those shares to cover margin. It will reduce stake of directors in company and a new identity could take over management if bought a good proportion from market. Thinking that new identity will be more desciplined then current directors, it has given company a better future possibility.
Satyam was surely a grwoing company and was having a strong place in IT service provider companies. If management really cares about company and proper corporate governance are put in place, it is no doubt that it will not only recover its position but also reach new levels. What do you think?
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