Satyam Board Announces Key Actions
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Hyderabad, INDIA, January 23, 2009: Satyam Computer Services Limited (NYSE: SAY) today announced several key decisions from its two-day Board of Directors meeting, which ended today. The meeting, the board’s third in 13 days, was chaired by Tarun Das, and focused on ensuring Satyam’s business continuity.
Chief among the developments is that Satyam is in the final stages of arranging additional funding to help cover operational expenses, including salaries and vendor payments, through March. The Board expects to secure funding and make a formal announcement to that effect before Wednesday. In addition, the Board announced that the company’s fixed assets, including all campuses it owns, are free of encumbrance, and that collections from receivables have been robust. However, noting Satyam’s demanding financial situation, the Board and leadership team discussed ways to expedite collections due from customers, and to also execute prudent cost-optimization measures.
Also, the Board announced that it has narrowed its list of candidates for chief executive officer and chief financial officer to three each, and will announce appointments to these postions next week. The Board confirmed that the new CEO will be a leader of global renown and uniquely qualified to lead Satyam during this transition period.
“This is a crucial decision for the company and its stakeholders,” said Das. “We fully recognize the urgency and importance of having the right person with the right experience and abilities steer Satyam through these turbulent times.”
The Board, which was put in place by the Indian government, has been actively supporting Satyam since its inception. Several have been very visible in Hyderabad, and are helping manage the organization and its operations. In addition, the Board met with several investment bankers to seek advice on strategic options, and will appoint one within a few days.
As for customer issues, the Board confirmed that it has taken the following steps in the last few days:
- Board members have spoken to almost two dozen key customers
- The Board is sending personalized, direct communication to all key customers, articulating recent positive developments, to restore their confidence in Satyam
Meanwhile, business leaders and Board members continue to engage with customers and reassure them about meeting commitments. Existing customers continue to release new work orders and have given positive feedback about timely delivery of projects and adherence to service level agreements. In fact, several large customers have visited Satyam development centers in India and expressed their satisfaction with associates’ commitment to their projects.
“There is a pronounced shift in customer attitudes—from alarm in the initial days to a sense of cautious optimism,” said Board Member Kiran Karnik. “Actions we have taken, and those we plan, are having a distinct impact on customer confidence."
Furthermore, the Board is closely monitoring customer attrition; no material impact has been seen thus far.
On the employee front, Satyam leaders have increased and enhanced interactions with Associates at all levels to understand their concerns and update them about developments. Associate attrition also remains well under control.
“Associates continue to show great resilience and exceptional commitment toward Satyam and its customers during these challenging times, in spite of the sustained media onslaught,” Das said.
Recently, the Board held a conference call with Satyam’s global business leaders globally to understand field-level realities. The Board will also reach out to associates all over the world through a video that will be webcast today and be made available on www.satyam.com shortly thereafter.
The Board will convene again Monday and Tuesday, January 26th and 27th.
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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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