The Company Law Board (CLB), the apex regulator of companies, has given the go ahead to Satyam Computer Services to increase its capital base and rope in strategic investors. CLB has given the nod to the fraud-hit IT major to up its authorised capital to Rs 280 crore from Rs 160 crore. Satyam's government appointed board has also received a nod to make a preferential allotment of at least 26% of its equity, either at par or a premium.
Satyam's suitors include engineering group Larsen & Toubro (L&T), Tech Mahindra, BK Modi-owned Spice Group, and Hinduja Group. L&T has said that it's currently reviewing the CLB order and only after that will take a decision. The new board has appointed investment banks Goldman Sachs and Avendus to find strategic investors.
Satyam needs a strategic investor to bring in new management, induct funds to pay employees and stop clients from abandoning the firm.
In another development, Satyam has decided to relocate most of its onsite support staff to low-cost destinations. The company has also put a freeze on capital expenditure ahead of the strategic sale.