Satyam Announces Commencement of
Process to Select an Investor
Hyderabad|India|March'2009: Satyam Computer
Services Ltd. (NYSE: SAY; BSE: SATYAM; NSE: SATYAMCOMP) (the "Company")
has announced on 9th March that it is commencing a competitive bidding
process which, subject to receipt of all approvals, contemplates the
selection of an investor to acquire a 51% equity interest in the Company.
Based on the Securities and Exchange Board of India’s
(“SEBI”) response to the Company’s application seeking relaxations from
certain requirements under Indian law, the Board proposes to follow the
bidding process outlined below.
Transaction Structure:
The acquisition is expected to occur in the following related steps:
- An initial subscription by the selected investor of newly issued
equity shares representing 31% of the Company’s share capital after
giving effect to the share issuance (“enhanced share capital”);
1 Upon deposit of the entire subscription amount by the selected
investor with the Company and requisite funds for the public offer in
the escrow account as required under the SEBI Takeover Regulations,
the investor will be required to make a mandatory public offer to
purchase a minimum of 20% of the Company’s enhanced share capital.
The public offer will be made at the same share price as the price
paid by the investor for the initial subscription; and
2 If upon the closing of the public offer, the investor would
have acquired less than 51% of the enhanced share capital of the
Company through the initial subscription and the public offer, the
investor would have the option to subscribe to additional newly issued
equity shares, such that the shares acquired by the investor through
the three related steps, the initial subscription, public offer and
the subsequent subscription (if any) will result in the investor
acquiring not more than 51% of the enhanced share capital of the
Company. Ability to subscribe to additional equity shares in the third
related step would be subject to the terms and conditions specified in
the request-for-proposal (“RFP”). The subsequent subscription, if any,
will be required to be completed within 15 days of the closing of the
public offer and will not result in requiring a further public offer.
Process for Registration of Interest:
- Commencing on 9th Maarch'2009, all interested bidders should
register their interest in participating in the bidding process by
accessing
http://www.satyam.com/bidprocess/march09/index.asp and registering
their interest by 5:00 PM Indian Standard Time on Thursday, March 12,
2009, subject to their meeting the registration requirements set forth
on such website. Interested bidders may see
http://www.satyam.com/bidprocess/march09/index.asp for more details.
- The process for selecting a bidder shall be overseen by a former
Chief Justice of India or a former Supreme Court judge appointed by the
Company.
Bid Process:
- Each interested bidder that has validly registered its interest in
participating in the bid process by 5:00 PM Indian Standard Time on
Thursday, March 12, 2009 will be sent an RFP shortly thereafter, and
asked to submit a detailed Expression of Interest (“EOI”) together with
the proof of availability of funds in the amount of at least Rs. 1,500
crores (US$290 million based on exchange rate of Rs. 51.635 to US$1) by
5:00 pm Indian Standard Time on Friday, March 20, 2009.
- Based on submitted EOIs, eligible bidders will be short-listed and
given access to certain business, financial and legal diligence
materials relating to the Company provided they have executed a
non-disclosure and non-solicitation agreement, a stand-still agreement
and a ‘no-claims’ undertaking. After completion of the due diligence
process and execution of the pre-financial bid documents, all
short-listed bidders will be asked to submit their financial bids and an
executed copy of the share subscription agreement.
- Based on an evaluation of the bids, the Company will select the
successful bidder, after which the successful bidder will have four days
to deposit with the Company the entire subscription amount, and the
requisite funds for the public offer in an escrow account.
- As a result of a relaxation from SEBI, there is no requirement to
have a minimum floor price that is otherwise required under Indian law
in connection with the initial subscription.
- Upon selection of the successful bidder, the Company will be
required to approach the Company Law Board and SEBI for approval and,
upon receipt thereof, the successful bidder would be allowed to
consummate the subscription.
Further details of the bidding process and other terms
and conditions would be set forth in the RFP.
Reachout's News Bureau
March' 2009
