For Satyam, the deal comes not only as a blessing as finally Satyam has managed to find a strategic investor that will infuse the much-needed funds to revive it but also at an opportune time for the technology outsourcer, which is at the center of India's biggest corporate fraud inquiry.
Ever since Satyam's founder and former chairman Ramalinga Raju admitted to cooking the company's account books by over $1.5 billion, Satyam has witnessed erosion of its market value by over a tenth and its scrip, which was once being quoted at a price of Rs.542 per share plunged to a low of Rs.6.30 per share on the National Stock Exchange on January 9.
The troubled outsourcer also witnessed an exodus of customers and reportedly lost valuable clients like Coca Cola Co., GlaxoSmithKline (GSK), Telstra, Applied Materials, and US State Farm Automobile Insurance while others like Assurant, Visa Inc., Citigroup, Merrill Lynch, Selective Insurance Group Inc., SanDisk Corp. and Novartis were rumored to have been keen on reworking their contracts with Satyam.
Thousands of its employees, including those at the senior management level, also quit the company, fearing that the cash-strapped company would soon be liquidated.At such a time, a new owner, market analysts said, gives Satyam a new lease of life, a rebirth and improves its credibility before investors, customers and creditors.
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