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Satyam getting new contracts: AS Murty

This article was posted on Feb 11, 2009 and is filed under Stock News

New Delhi: Even as a few customers have left in the wake of the financial fraud committed by its erstwhile promoter, Satyam Computer said on Wednesday that it is continuously getting new software services orders and existing clients have showed faith in the company. Satyam Computers said that it is continuously getting new software services orders

“A significant majority of our clients have indicated their support for Satyam, and are staying with us. Orders continue to come in, and the organisation is (making) efforts to grow new businesses,” Satyam Computer CEO AS Murty said.

Asked if he visualises Satyam regaining its earlier position of the fourth-largest software exporter, the CEO said, “The board and senior management have been in constant contact with customers and associates to assure them of business continuity. To this point, our efforts to provide clear, consistent and forthright communications are working.”

Earlier Infosys, TCS and mid-sized IT firm Infotech had said some Satyam clients have approached them. In January, State Farm Insurance Co of the US terminated its contract with Satyam. Its other key customers — GE, Nestle, Coca Cola, and National Australia Bank — had earlier said it would suspend new contracts given to Satyam.

On working alongside the rivals, Murty said, “We continue to compete for new businesses with Infosys and TCS and other companies in all the markets we serve.”

“With a new management at the helm of affairs, Satyam Computer is also looking at long-term strategic options and reviewing its legal liabilities.”

“My immediate short-term priority as CEO would be to initiate and continue measures that will instill confidence in all our stakeholders, customers, associates, alliance partners, vendors, etc. and to ensure business continuity.”

The CEO said his priorities are also to address key customer concerns, focus on delivery, reinforce associate confidence and introduce key retention measures.

With Satyam’s market value plunging to less than $700 million from $7 billion in May 2008, the company is weighing long-term strategic options.

“Our other priorities are evaluating long-term strategic options, assessing and managing legal liabilities and resuming investments in identified areas,” Murty said, adding the company recently got a financial commitment of Rs 600 crore for working capital needs and has receivables of up to Rs 1,700 crore.

BK Modi’s Spice Corp and L&T Infotech, which is a 12 per cent shareholder, are among the possible firms interested in taking over the scam-hit company.

The focus is on assessing the company’s financial position and taking measures to ensure business continuity as well as evaluating cost-rationalisation alternatives, he added. He, however, did not elaborate on cost-control measures. It could mean staff reduction wherever possible.

Murty said, “We are in the process of creating detailed plans for the next 30, 60, and 90 days. Having secured funding, our immediate focus remains on working closely with our associates, customers and partners, determining Satyam’s strategic options, and providing stability and leadership.

When these are achieved, we will turn our attention to medium- and long-term programs. The options will address the interests of all stakeholders”, he said.

The company has formed a task force to look at cost optimisation, which will involve exploring options such as optimising infrastructure spend, non-billable travel, and balancing onsite-offshore people-related costs and sabbatical to keep expenses in tune with revenue.

Large-scale layoff is definitely not among the options Satyam is considering at this time, company officials said.

Satyam’s founder B Ramalinga Raju on January 7 confessed to doctoring the accounts of the firm, resulting in a Rs 7,800 crore fraud.

Satyam Computer was trading at Rs 42.35, down 4.19 per cent, in morning trade on the Bombay Stock Exchange.

source: DnaIndia

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