A Satyam board meeting is on to try and spot or select a CEO for the company. Phaneesh Murthy of iGate has been watching by the developments of the last couple of weeks and gives his perspective on the issue.

Phaneesh Murthy of iGATE said his company is open to buying Satyam. “We would value Satyam on the basis of its assets and customer base. However, we will be on a wait and watch mode till the board comes out with a decision.”

Here is a verbatim transcript of the exclusive interview with Phaneesh Murthy on CNBC-TV18. Also watch the accompanying video.

Q: Do you think the CEO would be an insider from Satyam or an outsider from the IT world?

A: I think it is pretty clear that it is unlikely to be an insider because from multiple perspectives there are so many people, from Satyam presumably, who have been involved in trading and so on. Even if they didn’t know exactly what was happening on the financials, presumably, they may not have a CEO of a troubled company at this point of time. So, I do believe that it will be an outsider from the industry.

Q: And when that CEO is appointed, do you think he should or he would try to salvage Satyam and see if it can be carried forward as a business, as it was, or do you think he will cut to the chase and try to do the seemingly easier job of trying to sell it off to another party minus the liabilities?

A: I would assume that if it is a CEO who is appointed he would try and salvage the company. His job depends on salvaging the company to some extent, otherwise the board would, or probably the CEO, would just split the company up and sell it right now––then the company doesn’t really need a CEO. If a CEO is being appointed it is to the intention of trying to salvage as much as the company as possible, I would believe.

Q: Some press reports indicated that you said iGate might be interested in buying Satyam or parts of Satyam. Is that true?

A: Absolutely. In spite of all of the problems of Satyam there are good assets in Satyam. They have good customers that they are working with. There are good employees who are working on many of these projects and many of these accounts. So those are the real tangible assets of Satyam. In addition to the fact that there is some land and so on, that’s also a real tangible asset but the primary assets as an IT company that we look for are the accounts and the people who are working on this.

So my argument is that Satyam might have two–three paths presumably available to it. One could be to split the company up, auction of certain accounts and raise enough capital to keep the company going because it is clear that raising capital right now with the unknown liabilities is quite difficult. So they might be forced to do this in the interim short-run to raise enough capital to keep the rest of the company going.

Second option is to sell the whole company, for that of course it’s going to be a slightly longer-time story because until somebody understands what the financials are, of course, there is a question of unknown liabilities. However, I do believe in this case, it’s also a question of unknown revenues because nobody knows what the revenues of this company are. So that’s going to be a longer-term story because the auditors have to get into to some significant amount of work, etc.

Third, even if they go down their path one still needs to have access to fair amount of capital to make this work in a reasonable manner. So I would say that there are options available and the board is probably going to come out with their strategic evaluation and decide what’s going to happen.

Therefore, at the moment we are just waiting and watching and seeing when they come out with their evaluation and direction then based on the direction that they set we would probably either dive in or stay on the sidelines based on the direction that they come out with.

Source: moneycontrol

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