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Anil Ambani appears on Raju radar

Anil Ambani is emerging as the white knight who can spring to the rescue of B. Ramalinga Raju, promoter of the beleaguered Satyam Computer Services Ltd.

Raju clings to a small 5.13 per cent stake in the country’s fourth largest software exporter and a very shaky position as the chairman of Satyam heading into a crucial board meeting scheduled for January 10.

The Satyam promoters faced a shareholder revolt after an aborted plan to acquire two Raju-owned entities — Maytas Infra and Maytas Properties — for $1.6 billion. Angry shareholders have been clamouring for an overhaul of the board of directors and Raju’s exit from the post of chairman.

The call for change gained momentum after four of the nine Satyam directors resigned when they learnt that the Raju family had pledged their entire 55 million shares (equivalent to an 8.27 per cent stake) held by SRSR Holdings — an entity controlled by the Rajus — with lenders.

Enter Anil Ambani’s Reliance ADAG Group.

Sources say that under a quid pro quo deal that is now under negotiation, cash-rich ADAG Group can provide funds to help Maytas Infra achieve financial closure for the Rs 12,000-crore Hyderabad metro project before the March 31 deadline.
In return for the Maytas bailout, ADAG will be able to pick up a 13-14 per cent stake in Satyam, thereby emerging as the single largest shareholder of the software giant that counts 185 Fortune 500 companies among its clients.
Ambani won’t have to come out with an open offer if he doesn’t cross a 15 per cent threshold through this “friendly takeover”.

Sources say Reliance Mutual Fund and the insurance arms of the ADAG group have been scooping up Satyam shares over the past few weeks after the lenders started offloading the shares that the Rajus had pledged against loans.

Raju had failed to meet margin calls from the lenders after the Satyam stock tanked in the market meltdown since May. Lenders usually lend up to 75 per cent of the value of the shares pledged. The stock has plunged over 60 per cent since May and the lenders wanted the Rajus to compensate for the dimunition in the value of the stock.

Although the Raju family claims that it has a 5.13 per cent stake in Satyam after the sale of the pledged shares by lenders, the promoters’ position is a little more precarious.

On Friday, the promoters admitted in a filing that out of the 34.58 million shares (or 5.13 per cent) they nominally possessed, about 21.96 million shares were still pledged with the lenders. This means that the promoters actually have unfettered control over only 12.62 million shares (translating into a 1.26 per cent stake).

Sources in the Andhra government said ADAG Group had been showing keen interest in the Hyderabad metro project that had been bagged by Maytas Infra.

Maytas Infra ran into trouble of its own after its chief executive officer P.K. Madhav was arrested on criminal charges stemming from the Nagarjuna Finance payment scandal. Madhav was earlier with the Nagarjuna group.

Maytas has to pay Rs 11 crore to the Greater Hyderabad Municipal Corporation by March 31 in connection with the metro project but is unable to rustle up funds in a credit-scarce market.

Sources said both ADAG Group and L&T Infotech had been in separate talks with the Satyam promoters and the Andhra government to infuse funds into the special purpose vehicle floated by Maytas for the metro project.

Andhra chief minister Y. Rajashekhara Reddy has brushed aside suggestions that the turmoil at Satyam has jeopardised the Hyderabad metro and the Machilipatnam port projects that Maytas had bagged. “We have been informed by the promoters that there is no threat to these projects,” he told reporters on New Year’s day.

January 5, 2009 Posted by | news | , , , , , , , , , | Leave a comment