Satyam Computer Services Ltd. (fka SAYCY)

[califax]

Satyam shares rise for 8th day as bidders circle

http://www.finanznachrichten.de/nachrichten-2009-01/12953927-satyam-shares-rise-for-8th-day-as-bidders-circle-020.htm

28.01.2009 11:02
Satyam shares rise for 8th day as bidders circle

NEW DELHI, Jan 28 (Reuters) - Shares in Satyam Computer Services (News) rallied as much as 18 percent on Wednesday, extending gains to an eighth session, after the fraud-hit outsourcer's new board said there had been wide bidding interest and a transparent process would be devised.

Boston Consulting Group, which was appointed on Tuesday as management adviser in the revival process, sees Satyam as a quality company with a viable business, one of its India directors told Reuters on Wednesday.

'You have to understand that the quality and capability of this company ... just because a few people did some fraud and created an issue on the balance sheet does not mean that this company is not a very high-quality company,' said James Abraham, a director and partner at BCG's Indian unit.

Satyam, India's No. 4 software exporter, was plunged into a crisis after its founder Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.

The government stepped in to limit the damage from India's biggest corporate fraud and appointed a new six-member board, which has been meeting on a weekly basis.

On Tuesday, it appointed Goldman Sachs and Avendus, an Indian investment bank, to identify strategic investors and obtain expressions of interest.

Engineering conglomerate Larsen&Toubro, which also runs a small software firm, has trebled its stake in Satyam to 12 percent and its chairman said on Tuesday it would not be averse to raise it further to 15 percent.

Under Indian law, this would trigger an open offer for a further 20 percent.

'The market is expecting some kind of an open offer,' said Gajendra Nagpal, CEO at Unicon Financial. 'And some confidence has been restored with hopes that shares are going to a credible hand like L&T.'

The open offer is usually based on the average price over the last six months or some 335 rupees, according to Thomson Reuters data, but Nagpal said there was a possibility the market regulator could relax rules as Satyam shares had plunged.

'We are hoping that it won't be less than 90 rupees. So it's a punter's call to make some quick money,' Nagpal said.

Satyam shares were trading 17.9 percent up at 55.60 rupees at 0839 GMT, after touching a high of 55.75 rupees, which was their highest since Jan. 7, the day Raju revealed the fraud and resigned.

T.N. Manoharan, a member of Satyam's new board, said on Tuesday it had received several proposals from companies as well as buyout firms and would devise 'appropriate, fair and transparent measures' for enbling open bids.

U.S.-based outsourcer iGate has said it would be interested in buying Satyam with PE help.

Satyam's board members have said they were arranging funds from banks and financial institutions, including state-run Life Insurance Corp that owns about 4.3 percent of Satyam.

The board said on Tuesday January salaries would be paid as scheduled from internal accruals and receivables. The proposed management structure would be released this week, the board said.

(Reporting by Devidutta Tripathy; Editing by Ranjit Gangadharan) Keywords: SATYAM/

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