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Satyam to divest stake in joint venture to GE

Bipin Chandran & Partha Ghosh

Satyam Computer Services has firmed up plans to sell its 50 per cent shareholding in Satyam GE Software Services Pvt Ltd to its foreign partner, GE.

The Satyam group company, which is into software development and services, will sell its entire shareholding to GE for a consideration close to $4 million, said sources.

Satyam GE on Thursday filed an application with the Foreign Investment Promotion Board seeking permission to transfer Satyam Computer's 50 per cent shareholding to GE, said sources.

GE's investment in the joint venture is routed through a Mauritius investment vehicle, GE Pacific (Mauritius) Ltd. The transfer is subject to fulfillment of terms and conditions specified in the agreement between the two partners and after obtaining necessary approvals from appropriate authorities, including the FIPB.

After the implementation of the scheme of acquisition of shares, the JV will become a wholly owned subsidiary of GE.

Satyam did not give any reasons for its equity divestment in the JV. But this decision comes in the backdrop of the Indian company also expressing its intention of divesting partly or fully its shareholding in its Nasdaq-listed Internet service provider (ISP) subsidiary, Satyam Infoway Ltd.

Satyam Computer holds 50 stake in three joint venture companies - Satyam GE Software Services Pvt Ltd, Satyam Venture Engineering Services Pvt Ltd and CA Satyam ASP Pvt Ltd.

It is the fourth largest provider of IT services in India, based on the amount of export revenues generated during fiscal ended March 31, 2001.

It offers a comprehensive range of services, including software development, system maintenance, packaged software integration, and engineering design services.

Its total revenues increased by 45.5 per cent to $306.9 million in the nine months ended December 31, 2001, from $210.9 million in the nine months ended December 31, 2000.

As of December 31, 2001, Satyam Computer had 9,645 employees.

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