Goldman, Avendus appointed Satyam investment bankers

Hyderabad, Jan. 27 The board of Satyam Computer Services today appointed Goldman Sachs and Avendus Capital as investment bankers, while asserting that the company will not be sold in parts for now.

The six-member board also named Boston Consulting Group (BCG) as management advisors and said that employees will get salaries on schedule.

The much-expected appointment of a CEO and CFO, was, however, not announced. Goldman Sachs and Avendus are expected to give advice on zeroing in on a strategic investor, getting expressions of interest and ensuring transparent investment process, according to the board member Mr Deepak Parekh, Chairman of HDFC.

In the wake of the Rs 7,136-crore financial fraud, the company is faced with problems of liquidity and funds. The investment bankers could suggest ways of infusing fresh capital as well.

Mr Parekh said the board had almost finalised a financial plan to take care of the operational expenses of Satyam.

On the question of working capital needs, Mr Balakrishna Mainak, another director and Executive Director of LIC, said the board was parallely talking to bankers and financial institutions (including LIC) to secure working capital loans

“The company has got sound, free fixed assets. To obtain loan on these fixed assets is not at all a problem,” he told the Satyam staff in a Webcast.

Mr T.N. Manoharan, who chaired the board meeting, said the sale of Satyam in parts (along businesses and verticals) was against the mandate given to it by the Government. “We are not considering that option, though we have received proposals from corporates and private equity firms to buy Satyam as a whole and in portions,” he said.

The mandate for BCG would be to support the directors and the leadership team at Satyam. A three-member team would be named soon for this purpose.

Responding to the large-scale acquisition of Satyam shares by L&T, Mr Manoharan said the board had no clue on their motive. “The reasons for the same are best explained by the purchaser. It should not be taken as an indication of support by the Government nominated board, for change of control of Satyam, at this stage,” he said.

“Appropriate, fair and transparent measures for enabling open bids will be devised by the company’s board in consultation with SEBI and the Government of India,” he asserted in a press release after the board meeting.

Suspended: Price Waterhouse has suspended Mr S Gopalkrishnan and Mr Talluri Srinivas, the two partners based in Hyderabad and involved in auditing of Satyam.