Satyam Computer Services Ltd. said the Company Law Board, or CLB, has issued an order today approving the selection of Venturbay Consultants Pvt. Ltd., a subsidiary controlled by Tech Mahindra Ltd., as the successful bidder to acquire a controlling stake in the company.
As a result, Satyam will allot 30.28 million shares, representing 31% of the share capital to Tech Mahindra at a price of Rs.58 per share. The share will be issued after Tech Mahindra deposits the subscription amount of Rs.1,756 crore or $351 million and the requisite escrow amounts for the mandatory cash tender offer to acquire an additional minimum 20% of the enhanced share capital and convertible instruments in separate escrow accounts on or before April 21, 2009.
The above issuance of shares is subject to fulfilling certain closing conditions and obtaining the required regulatory approvals, including approval from the Securities Exchange Board of India of SEBI.
In its order, CLB also granted Tech Mahindra the right to appoint not more than 4 of its nominees as directors on the company's board, upon Tech Mahindra depositing in escrow in cash the total funds necessary to consummate the public offer. The present 5 directors appointed by the Indian government will continue on the board until further orders of CLB. Indian government will not appoint any additional directors.
The CLB, in its order, further directed state and central government agencies not to initiate any action, in exercise of their powers, against Tech Mahindra's nominee directors for acts prior to January 9, 2009, without the prior leave of the CLB, for as long as Company Petition 1 of 2009 is pending before the CLB.
In addition, as the accounts of the company have to be restated after audit for a period of six years, CLB has granted the company an extension of time until December 31, 2009 to file returns/documents, as required under applicable laws, including publication of quarterly reports as required under the listing agreement.
At the BSE, Satyam closed Thursday's trading at Rs.45.05, down by Rs.2.55 or 5.36% on a volume of 94.59 lakh shares, while Tech Mahindra closed at Rs.349.75, down by Rs.18.85 or 5.11% on a volume of 6.34 lakh shares.
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