Sell Satyam: Target Suspended

With the arrest of both Satyam Computer Services Ltd.’s (NYSE:SAY) ex-CEO and ex-CFO, the interim management announced that it’ll make all attempts to clean up its books and appoint a new auditor. A new Board has been formed to spearhead the task of salvaging the company, and three members have already been appointed by the Government of India itself.

A majority stake sale is currently being undertaken, and the Board of Directors announced that it will release the Request for Proposals (RFP) to all registered bidders. Previously, the Indian government announced that it would not step up to help Satyam with any financial assistance, citing the company’s current receivables of approx. $350 million.

Given the recent developments, we had earlier downgraded SAY shares to a Sell and have suspended our estimates and target price.

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