Satyam Computer Services Ltd has received approval from the Securities and Exchange Board of India (SEBI) to sell 51 per cent of its stake through a global competitive bidding.

Satyam, which has been mired in country's biggest corporate scandal, said it will sell 51 per cent stake in the company in a two-phased global bidding process, subject to receipt of all approvals.

A selected investor will acquire newly issued equity shares representing 31 per cent of Satyam's share capital and then make a mandatory minimum public offer to buy a further 20 per cent stake, the company said in a statement.

Under the two-phased sale process, the selected investor will subscribe to 31 per cent of Satyam Computer's newly issued equity shares. Upon successful closing of the subscription, in accordance with SEBI takeover (now amended) regulations, the investor will make an open offer to purchase a minimum 20 per cent of the company's share capital. 

The open offer will be made at the same share price as the price paid by the investor for the subscription.

If upon the closing of the open offer, the investor would have acquired less than 51 per cent of the share capital of the company through the subscription and the open offer, the investor would have the right to subscribe to additional newly issued equity shares, such that the shares acquired by the investor through the three related steps, the initial subscription, open offer and the subsequent subscription (if any) will result in the investor acquiring 51 per cent of the share capital of the company. 

The subsequent subscription, if any, will not result in requiring a further open offer.

The investor will not be permitted to sell any equity shares acquired for a period of three years from the date of the acquisition, although the investor would be able to subscribe for additional equity shares.
 
The company expects to invite expressions of interest from qualified investors shortly in a global competitive bidding process. Qualified investors are expected to have total net assets in excess of $150 million.

Satyam Computer Services said it will issue another press release with more details of the competitive bidding process as soon as such details are available.

Securities may not be offered or sold in the United States in the absence of registration or an exemption from registration under the US Securities Act 1933, as amended. 

"Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the company and that will contain detailed information about the company and its management, as well as financial statements,'' the release said, adding, '' The company does not intend to register any securities in the United States or to conduct a public offering of securities in the United States.''

SEBI had granted approval for exemptions from certain requirements of the takeover regulations to facilitate the global competitive bidding process for the fraud-hit Satyam Computer Services.

The Company Law Board has also authorised Satyam's board of directors to select an investor, subject to certain conditions. SEBI's approval itself is no guarantee that any qualified investor will bid to acquire any interest in the company at an appropriate price, the release added.

New York-listed Satyam expects the stake sale to a strategic investor to restore confidence of its roughly 50,000 staff and more than 600 customers that includes General Electric, Cisco and Qantas Airways.

Satyam had to struggle for survival after its founder and chairman Ramalinga Raju quit in January, saying profits had been overstated for years and assets falsified.

Top companies, including engineering and construction major Larsen & Toubro, Hinduja Group and Spice Group are interested in acquiring Satyam Computer Services.