India's scandal-hit Satyam Computer Services is to invite formal bids from potential suitors this week, pushing ahead with a possible sale - even though it could be months before its accounts are restated.
The country's fourth-largest information technology outsourcing group, which has appointed Goldman Sachs and Avendus Capital as advisers, will invite expressions of interest as soon as regulatory approvals are completed.
"While the accounts restatement in a formal sense and the audit is going to take a long time, the clarity with regard to the real situation (of the company's business) is fairly clear," Kiran Karnik, chairman of Satyam's government-nominated board, told the Financial Times.
A sale would set Satyam on the path to recovery after it was brought to its knees in early January by the confession of B Ramalinga Raju, former chairman, that he had manipulated its books for several years.
The company faces several lawsuits in the US, with one law firm reportedly threatening to seek an injunction against any sale of Satyam until the cases are resolved.
Analysts were sceptical over whether Satyam could engineer a sale until its accounts were fully restated and the lawsuits cleared.
"Without any reliable financial data, how can you buy it?" said one analyst.
"The company is being valued based on its clients and trained workforce," said Harit Shah at Mumbai-based Angel Broking. But he admitted any acquisition would be risky. "Lawsuits in the US are the biggest challenge ahead for anyone who buys the company."
The new board has replaced PwC, Satyam's former auditor, with KPMG and Deloitte and ordered them to restate the company's accounts.
But this process could take "weeks, if not months", said Mr Karnik. He added: "We made a conscious choice that we don't want to wait. What we will be able to share with prospective bidders is everything that we know that can be easily shared, which will be things like customer orders, things on the books and so on.
"The only true unknown is the liability that might arise out of class action suits in the US and any other legal things that come."
A potential bidder for Satyam is Indian engineering group Larsen & Toubro, which has appointed Citigroup and Nomura as advisers, people familiar with the matter said. Larsen & Toubro and Citigroup declined to comment.
Copyright The Financial Times Limited 2009
