US IT firm iGate expects to see Satyam finances

US IT services provider iGate has expressed aninterest in buying Satyam public.It is waiting to see financial...

US IT services provider iGate has expressed aninterest in buying Satyam public.It is waiting to see financial data from the fraud-hit Indian company before moving forward.

Will IBM, HP and CSC who have all been tipped as interested in Satyam, follow ?

The first deadline in the Satyam sale ended yesterday,with reports of up to eight interested parties and at least one Western firm requesting financial data on the fraud-hit firm.

Four companies,includingthree non-IT suppliers,have announced their interest. They are Indian engineering giant Larsen & Toubro, the Spice Group, Tech Mahindra and US IT supplier iGate.A Satyam spokesman said details of the interested parties will be given next week.

The bidders will not see the full audited accounts, but shortlisted bidders will be given access to business, financial and legal diligence materials. They will have to sign a non-disclosure agreement to qualify.

Former Satyam chairman, B. Ramalinga Raju, admitted in January that he had falsely reported the company's results. This left the company short of cash and its customers short of confidence.

iGate said in a statement: "[We are] now expecting to receive the latest financial statements, including those for the quarter ended December 2008 and the months of January and February 2009, and updated position on liabilities and potential liabilities of the company. In the event of iGate not receiving this information immediately, it has no option but to withdraw its expression of interest."

Satyam nowrequires more detailed expressions of interest and proof from bidders of available funds to the value of $290m by 20 March 2009.

Phil Morris, European managing director at sourcing consultant Equaterra, said the buyer does not necessarily have to be a recognised IT company.

"For example, an engineering company could fit because this type of company hasgone down a software and consultancy route in the past. Although I would not say this is an easy fit."

He added that a company such as IBM would be in a good position to lift Satyam back to where it was before the fraud scandal.

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