Satyam Computer Services Limited today announced key decisions finalised at the third board meeting of the new board. The board meeting reveals that the company has arranged interim financing from bankers and has also shortlisted candidates for the post of CEO and CFO.
This meeting, the third in 13 days since its reconstitution, was chaired by CII's chief mentor Tarun Das. The meeting focused on issues that are a priority for ensuring Satyam's business continuity.
Raising working capital
To tide over the ongoing requirements for operational expenses including salaries and vendor payments, the board also announced that additional funding arrangements are in the final stages of being concluded.
This is expected to be formally announced before 28 January, and will address the company's operational needs till end of March 2009, says board member Deepak Parekh, chairman, HDFC Bank.
The immovable properties of the company, including all campuses owned by it, are free of any encumbrance. The collections from receivables have been robust, so far. However, taking note of the demanding financial situation, the board discussed with the leadership team, ways and means to expedite the collections due from customers and to also execute prudent measures for cost optimisation.
The board announced that it has narrowed the shortlist for the CEO and CFO positions to the final three, and would finalise its decision, next week. The board also confirmed that the selected person will be uniquely qualified to lead the company during this period of transition and will be a leader of global standing and recognition.
The board also met and interacted with a number of investment bankers and will decide in the next few days on the company's future ownership.
Retaining customers and employees
Addressing customer issues, the board confirmed that it has taken the following steps in the last few days.
- The board members have personally spoken to almost two dozen key customers individually
- Personalised and direct communication by the board to all key customers articulating the positive developments to restore their confidence in Satyam
Business leaders and board members continue to be actively engaged with customers, reassuring them about meeting commitments. Contrary to common perceptions, existing customers continue to release new work orders and are expressing positive opinions on the timely delivery on SLAs, in their engagements.
A few large customers have already visited the company's development centres in India and have expressed their satisfaction on the team's commitment towards their projects.
Meanwhile in a regulatory announcement to the exchanges, outsourced services provider Infotech Enterprises disclosed, "Some of the customers of Satyam Computer Services Ltd had approached the company; these enquiries are related to the service areas where the company is strong." Infotech did not disclose any names.
Board member Kiran Karnik, former Nasscom chief, said, "There is a pronounced shift in customer attitudes - from being alarmed in the initial days, it has changed to a sense of cautious optimism. The planned actions will have a distinct impact on the customer confidence."
Customer attrition is being closely monitored at the board level and the board confirmed that it has seen no material impact so far.
On the employees front, business leaders have enhanced their interactions with associates at the floor level to understand their concerns and to keep them updated about the ongoing developments in the company. The associate attrition remains well under control.
The board is expected to meet again on Monday 26 January and Tuesday 27 January 2009.