Satyam Appoints Goldman Sachs and Avendus as Investment Bankers
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HYDERABAD, India, January 27, 2009: Satyam Computer Services Limited (NYSE: SAY) today announced that its board of directors has appointed Goldman Sachs and Avendus as investment bankers. The firms will help the board explore several strategic options, including identification of strategic investors; obtaining expressions of interest; and ensuring a fair and transparent approach to the process.
The board also appointed Boston Consulting Group (BCG) as management advisors. Three senior BCG representatives will work closely with Satyam’s board and leadership team to spearhead the organization’s revival. “It is important to note that BCG will not charge a fee for their services. This reflects their commitment to the task on hand,” said Satyam Board Member Deepak Parekh.
Additionally, the board:
- Concluded most discussions about Satyam’s financing requirements, and will wrap up negotiations with banks in the coming days. As a result, immediate operational expenses will be managed.
- Reaffirmed that January salaries will be paid as scheduled and from internal accruals and receivables.
- Further validated Satyam’s headcount. Sufficient data now exists to show that numbers reported earlier are accurate.
- Discussed Satyam’s future management structure, and will issue a statement on this matter this week.
“The board has received several proposals from corporate entities and from private equity firms,” said Board Member T.N. Manoharan. “Some are interested in evaluating Satyam as an integrated entity, while others have expressed interest in portions of Satyam’s business. However, selling ‘parts’ of Satyam would be contrary to the Indian government’s mandate regulating the company’s affairs as a going concern. Therefore, we are not currently considering that option.”
Manoharan was circumspect regarding a recent move by a corporate entity to acquire large portions of Satyam shares.
“The reasons for that move would be best explained by the buyer,” he said. “At this stage, it should not be taken as an indication of support by the government-nominated board for a change of control at Satyam. The board has received an adequate number of bidding interests. As such, in consultation with SEBI and the Indian government, it will devise appropriate, fair and transparent measures to enable open bids. It is important to remember that Satyam is a government-administered company, reporting to the Company Law Board and the Ministry of Corporate Affairs.”
In the meanwhile, Satyam leaders and the board continue to reach out to customers to ensure business continuity.
“I speak with quite a few customers and partners every day, and it is heartening to note that they continue to engage with us, confidently,” said Board Member Kiran Karnik. “While a few are discussing risk mitigation plans, most are monitoring our performance closely and want to see Satyam return to long-term sustainability.
“Additionally, we have been reassured by several key customers who have sent strong messages to other service providers asking them to refrain from poaching Satyam’s associates or business. We have also seen a steady improvement in statement of work extensions.”
Manoharan said these actions reflect Satyam’s determination to restore stakeholder confidence, ensure stability and growth, and “bring back the glory Satyamites truly deserve.”
Tuesday’s was the fourth meeting of its new board of directors since Jan. 10 (it also convened for more than three hours yesterday) and was chaired by Mr. Manoharan. Its next meeting will be Feb. 5.
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This press release contains forward-looking statements within the meaning of section 27A of Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Satyam undertakes no duty to update any forward-looking statements. For a discussion of the risks associated with our business, please see the discussions under the heading “Risk Factors” in our report on Form 6-K concerning the quarter ended September 30, 2008, furnished to the Securities and Exchange Commission on 07 November 2008, and the other reports filed with the Securities and Exchange Commission from time to time. These filings are available at http://www.sec.gov
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