NEW DELHI (Reuters) - Shares in Satyam Computer Services 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."
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