Tech Mahindra bags Rs 1,500-cr credit line to back its Satyam EoI
Tech Mahindra has less than Rs 100 crore as cash on its books. M&M may infuse part of money for bid, if required, said person familiar with situation.
By Gaurie Mishra & Dev Chatterjee, ET Bureau |
NEW DELHI/MUMBAI: Tech Mahindra has secured a line of credit for Rs 1,500 crore from five banks - SBI, IDBI, Kotak Mahindra Bank, HSBC and PNB - to back its expression of interest (EoI) for Satyam Computer Services, said a person familiar with the situation. The company is submitting a solo EoI, though it may tie up with a private equity player to make a final bid, said a person with direct knowledge of the development.
When contacted by ET, Tech Mahindra CEO, Vineet Nayyar declined to comment. All the potential suitors that have registered for Satyam have been sent a request for proposal (RFP) by the Satyam board and are expected to submit an EoI by March 20. The RFP states that any bidder must show proof of Rs 1,500 crore as cash balance when submitting the EoI.
While the other two main Indian bidders - L&T and the Spice Group - have the requisite money, Tech Mahindra has less than Rs 100 crore as cash on its books. The person with knowledge of the situation also said parent Mahindra & Mahindra may infuse part of the money for the bid, if required.
IBM, Fidelity and private equity firm KKR have also registered for bidding for Satyam. Based on the submitted EoIs, eligible bidders will be short-listed and given access to certain business, financial and legal diligence material relating to Satyam, provided they have executed a non-disclosure and non-solicitation agreement, a stand-still agreement and a ���no-claims��� undertaking. 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.
Meanwhile, the bidders that ET spoke to said they will not make aggressive bids for the accounting fraud-hit company. The suitors cite the legal liabilities and the unknown financial hole in Satyam balance sheet for their conservative bid estimates. While L&T officials refused to comment on the issue, a member of its board said the management is expected to abide by the board���s earlier advice that it should be conservative on its bid for the company.
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The company has still not called a board meeting to discuss the financial bid for Satyam, the director said asking not to be quoted.Download
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