Rediff Logo
 Money
Line
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Wedding | Women
Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel
Line
Home > Money > Reuters > Report
May 18, 2001 		Feedback  
  Money Matters

 -  Business Special
 -  Business Headlines
 -  Corporate Headlines
 -  Columns
 -  IPO Center
 -  Message Boards
 -  Mutual Funds
 -  Personal Finance
 -  Stocks
 -  Tutorials
 -  Search rediff

    
      

 
Reuters
 Search the Internet
         Tips
 Sites: Finance, Investment
E-Mail this report to a friend
Print this page

GE unit may buy out Satyam stake in JV

Leading Indian software services firm Satyam Computer Services said GE Industrial Systems will buy out Satyam's 50 per cent stake in a joint venture for $4 million this year if the venture's performance targets are met.

Satyam made this disclosure in its American depository share issue filing with the Securities Exchange Commission. The ADSs listed on the New York Stock Exchange on Tuesday.

The joint venture with the unit of General Electric was formed in December 1998 to provide GE Industrial Systems with engineering design services, software development and system maintenance services.

The document did not specify the performance targets. Company officials were not immediately available for comment.

Satyam has listed the GE joint venture as one of its two most important joint ventures, despite the low revenues from it.

"While this joint venture does not provide us with significant revenues, we believe this joint venture is significant because it has helped us to strengthen our relationship with one of our largest customers -- General Electric Company and its affiliates," it said.

Satyam cited its other chief joint venture as one with TRW Inc signed in September 2000 to offer services to TRW and other companies in the automotive sector. Satyam holds a 76 per cent stake in this venture.

Satyam said it had the option to buy out TRW's 24 per cent stake in the venture after December 2003. The buy-out price will depend on the value of business that TRW gives the joint venture, it said.

As per the agreement, TRW aims to outsource at least $200 million worth of business to the joint venture till December 2005. It also has the option to reduce this target amount to $100 million before May 31, 2001.

Satyam said that if the minimum target business was not met, it had the right to pay almost nothing for TRW's 24 per cent stake.

Satyam's ADS closed $0.39 up at $12.18 at the New York Stock Exchange, up 25 per cent over its offer price of $9.71.

Each ADS is equal to two domestic shares. The local share was flat at Rs 233.35 in Friday morning deals, while the Sensex was up 0.77 per cent.

Back to top
(c) Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Tell us what you think of this report