Satyam sale enters final stage today

The board is expected to open financial bids on Monday submitted by a few bidders remaining at the last stage. Among them are believed to be Tech Mahindra, L&T, Cognizant Technologies and some private equity funds. If the gap between the first and losing bids is less than 10%, then there will be open auction. The highest bidder in the auction will be declared the new owner.

On offer is a 31% stake in Satyam through a preferential share allotment, at the bid price, to infuse funds into the company. It will use these funds for working capital and to continue growing its business. Subsequently, there will be an open offer to buy 20% of its public stake. If the open offer is successful, the bidder will have a cumulative 51% stake. If not, the bidder can buy further preferential equity shares in the company directly to take the stake up to 51%. Ultimately, the bidder will get a 51% controlling stake in the company.

A successful sale without much controversy will mean a more stable future for Satyam. The company can go about winning back clients, with the backing of a more reputed name behind it. In the months since the scandal made headlines, there have been reports of several IT companies deserting it. The immediate benefits will be for employees as they will be free to get on with work rather than worrying about the fate of their company. The government too will have reason to be happy, it entered a company on the brink of bankruptcy, infused confidence but not taxpayer money, put professionals and not bureaucrats at the helm and facilitated a quick sale.

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