Satyam to Offer 51% Stake to Investor
Satyam Computer Services Ltd. Friday said it plans to offer a 51% stake to an investor, and that India’s capital-markets regulator has approved the bidding process.
Satyam said the investor will have to buy 31% of the company and then make an open offer for another 20% at the same price.
The investor won’t be allowed to sell the shares for three years.
The Hyderabad-based software maker said it will invite expressions of interest from companies shortly, adding that investors that want to buy a stake must have total assets of more than $150 million. It said the Securities and Exchange Board of India approved the global competitive bidding process.
Satyam has been in turmoil since founder B. Ramalinga Raju said in January that he overstated the company’s profits over several years and created a fictitious cash balance of more than $1 billion.
If the potential investor gets less than a 51% stake through the subscription and open offer, the investor would have the right to subscribe to additional newly issued equity shares that would result in a total 51% stake.
This article was originally posted on WSJ.com