The government-appointed board of Satyam Computer Services will meet informally in Mumbai on Friday to take stock of the ongoing bidding process and assess the technical competence of the suitors for the scandal-hit IT firm.
"It has been a week since the board has reviewed the situation," a company source told Business Standard. He said the members would take an update from the investment bankers, Avendus and Goldman Sachs, which held talks with the potential suitors.
Following this, the shortlisted bidders would be asked to submit the financial bids next week for acquisition of 31 per cent stake in Satyam. The winning bidder will have to make an open offer to shareholders to buy an additional 20 per cent stake. The board had earlier indicated that it was hopeful of finalising a buyer by April 30.
The board is understood to have shortlisted around eight bidders. These include the $7 billion engineering behemoth L&T's technology arm, L&T Infotech, IT major IBM and Tech Mahindra. The B K Modi-promoted Spice Group withdrew from the bidding process, citing lack of transparency.
The US-based private equity firm, W L Ross & Co, is learnt to have completed the due diligence on assets and liabilities of Satyam. On the financial front, Satyam is reportedly not facing any problem as the new board has tied up Rs 600 crore (Rs 6 billion) for working capital expenditure and paying salaries from IDBI and Bank of Baroda.
The improved situation, however, does not seem to be enough for the morale of the employees. The associates, as they are called at the company, are not hesitating to jump. "The situation is bad. Some people are leaving and some are being asked to leave. And more important, several positions are remaining vacant. The selected candidates for these posts are not coming," said an associate.
"There is talk now that the new company, whichever that is, will cut at least 10,000 jobs gradually. We are praying that this is unfounded," a senior associate said. She herself has sent out copies of her resume to her friends.
Some graduates are looking at higher studies and research as viable options, particularly in view of the market downturn. This is Plan B for some of them. For instance, a staffer who had done his MTech and was working with Satyam till two months earlier, has joined the Tata Institute of Fundamental Research.
Satyam sources peg the attrition rate at 12-13 per cent. In other words, close to 6,500 people leave the organisation on an annual basis. By these figures, Satyam's headcount should be less than 50,000 now.
Meanwhile, the XIV additional chief metropolitan magistrate has extended by another 14 days the judicial custody of Satyam Computer Services founder B Ramalinga Raju, his brother Rama Raju, former chief financial officer Srinivas Vadlamani and two Price Waterhouse auditors, S Gopalakrishnan and Srinivas Talluri till April 14.
