Satyam Invites EoIs by March 20
Satyam Computer Services is commencing a competitive bidding process which, subject to receipt of all approvals, will select an investor to acquire 51% equity stake in the company.
The board has proposed to follow a transaction structure with an initial subscription by the selected investor of newly issued equity shares representing 31% of the company’s share capital.
"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," the release added.
All interested bidders should register their interest in participating in the bidding process by accessing and registering their interest by 5:00 PM on Thursday, March 12, 2009, subject to their meeting the registration requirements.
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.
The Bid Process
* Each interested bidder 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 of at least Rs 1,500 crore ($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.
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