iGate no longer keen on Satyam: Phaneesh Murthy
US-based IT services firm iGate has opted out of the race to acquire beleaguered Satyam Computer Services.
By ET Bureau |
HYDERABAD: US-based IT services firm iGate has opted out of the race to acquire beleaguered Satyam Computer Services. iGate CEO Phaneesh Murthy said the firm has lost interest following the delay in the acquisition process. He feels the delay has led to several employees exiting and customers snapping ties. Besides, re-statement of accounts, a key component of valuation, would also take time.
���We were initially keen on buying Satyam hoping the government may buy out some of the liabilities of the company just as the US government did for many banks. A replication would have accelerated the pace of acquisition. But that has not happened. Hence, we have lost interest,��� he said.
���We are not sure of the company���s assets and liabilities and some of the prominent customers of Satyam are on their way out. Though there are business synergies between Satyam and iGate, it may not work in our favour if many employees and customers are not there,��� he said.
Engineering firm L&T, BK Modi promoted Spice Group and Tech Mahindra are still in the race to acquire Satyam. Satyam���s accounts are being re-stated after its disgraced founder B Ramalinga Raju admitted to perpetrating a Rs 7,000-crore financial fraud. iGate has about $70 million cash reserves and clocked revenues of $218.8 million in 2008.
���We hope the IT industry may turn around in the second half of 2009. By that time, we expect many clients to finalise decisions on their IT spend. However, we expect about 26-27% drop in IT budget of banking sector clients in the US,��� he said.
iGate has set up a second 500-seater facility in Hyderabad at an investment of Rs 10 crore.
���We already employ 500 people in Hyderabad. We will start hiring at the new centre depending on our future projects and demand. Along with the existing facility, the new centre will serve banking and finance, manufacturing and consumer products clients,��� he said.
The company also has a centre of excellence at its Hyderabad facility to cover manufacturing, logistics and banking verticals. Globally, the company has 6,600 employees.
���We were initially keen on buying Satyam hoping the government may buy out some of the liabilities of the company just as the US government did for many banks. A replication would have accelerated the pace of acquisition. But that has not happened. Hence, we have lost interest,��� he said.
���We are not sure of the company���s assets and liabilities and some of the prominent customers of Satyam are on their way out. Though there are business synergies between Satyam and iGate, it may not work in our favour if many employees and customers are not there,��� he said.
Engineering firm L&T, BK Modi promoted Spice Group and Tech Mahindra are still in the race to acquire Satyam. Satyam���s accounts are being re-stated after its disgraced founder B Ramalinga Raju admitted to perpetrating a Rs 7,000-crore financial fraud. iGate has about $70 million cash reserves and clocked revenues of $218.8 million in 2008.
���We hope the IT industry may turn around in the second half of 2009. By that time, we expect many clients to finalise decisions on their IT spend. However, we expect about 26-27% drop in IT budget of banking sector clients in the US,��� he said.
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iGate has set up a second 500-seater facility in Hyderabad at an investment of Rs 10 crore.
���We already employ 500 people in Hyderabad. We will start hiring at the new centre depending on our future projects and demand. Along with the existing facility, the new centre will serve banking and finance, manufacturing and consumer products clients,��� he said.
The company also has a centre of excellence at its Hyderabad facility to cover manufacturing, logistics and banking verticals. Globally, the company has 6,600 employees.
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