Satyam Computer Services Ltd. (fka SAYCY)

[mlkrborn]

UPDATE: Satyam Chairman Says Will Seek Listing Again On NYSE; Shares Surge
6:18a ET December 21, 2010 (Dow Jones)
UPDATE: Satyam Chairman Says Will Seek Listing Again On NYSE; Shares Surge

(Adds analyst comments, share price, background.)

By Raghavendra Upadhyaya and Kenan Machado
Of DOW JONES NEWSWIRES

HYDERABAD (Dow Jones)--Satyam Computer Services Ltd. (500376.BY) will seek to list again on the New York Stock Exchange after filing its results based on U.S. accounting standards, Chairman Vineet Nayyar reiterated Tuesday, driving the Indian software exporter's shares sharply up.
Satyam shares closed 8.8% up at INR69.05 after rising to a nearly one-month high of INR70.8 on the Bombay Stock Exchange, where the benchmark Sensitive Index gained 0.9%.
Satyam in late September said it would delist its American Depositary Receipts from the NYSE as it was set to miss an Oct. 15 deadline to file its results with U.S. regulators. On Sept. 29, Nayyar told reporters that the company would seek to list back on the NYSE, but didn't giving any time frame for it.
The plan to list Satyam back on the NYSE will be an important step in the fraud-hit company's road to recovery and its ability to attract clients who require vendors to prove financial viability--usually through their compliance with U.S. accounting standards.
"The completion of the accounts under the [U.S.] Generally Accepted Accounting Principles is expected to take another six to eight months," Nayyar told shareholders at the company's annual general meeting. "As soon as the accounts are done, we will be happy to relist [on the NYSE]."
Satyam's ADRs had started trading on the over-the-counter market on Oct. 14.
Satyam, based in Hyderabad, is in the midst of recovering from one of India's biggest corporate scandals. In January 2009, the company plunged into turmoil after its founder and then chairman, B. Ramalinga Raju, confessed to overstating the company's profits for years and holding a fictitious cash balance of more than $1 billion.
"If this [listing] happens, then they can seek more clients who would want their vendors to file under the U.S. GAAP," said Pralay Das, an analyst at brokerage Elara Capital.
Satyam is currently listed in India and is now controlled by Tech Mahindra Ltd. (532755.BY), which bought a stake in it through a government-monitored auction and rebranded it Mahindra Satyam.
The company has reported its results for the last fiscal year ended March 31 and the two quarters through September based on Indian accounting rules, but is still working on its accounts to meet U.S. standards.
For the second quarter ended Sept. 30, Satyam Computer reported a net profit of INR233 million, or INR0.20 a share, compared with INR975 million, or INR0.83 a share, in the first quarter. Revenue in the last quarter fell marginally to INR12.42 billion from INR12.48 billion in April-June.
It was the first time the Hyderabad-based company reported quarterly results since the July-September quarter of 2008.
Meanwhile, Nayyar said Satyam plans to invest INR4 billion to build offices at some special economic zones in the southern cities of Hyderabad and Chennai.
Companies with operations in special economic zones get certain tax exemptions, especially on their exports.
Satyam's share of revenue from low-cost locations rose to more than 48.11% during fiscal 2010 from 46.15% the previous year, Nayyar added. "This gives an indication of our focus to increase the services to our customers from offshore to save on operating costs."
The Hyderabad-based company is trying to focus on growth in the Middle East, Africa and Asia to offset the effects of the weakening euro, he added.
Satyam gets about 54% of its revenue from North America and 26% from Europe.

-By Raghavendra Upadhyaya and Kenan Machado, Dow Jones Newswires; [phone]; [e-mail]

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