Satyam, LIC discuss funding

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Mumbai: Scam-hit IT major Satyam Computer has initiated preliminary discussion with Life Insurance Corporation of India (LIC) on funding, a senior LIC official said.

“(We have held) informal talks but have not so far received any concrete proposal from Satyam,” the official saidon condition of anonymity. The life insurer was open to any viable proposal, the official said.

Satyam recently received loans of Rs 600 crore from IDBI Bank and Bank of Baroda, which has rendered it financially comfortable in the short term.

Satyam is understood to have pledged some part of itsland bank with the two financial institutions and is open to the idea of doing so in the future as well, to raise loans.

The Hyderabad-based company has approached two more public sector banks and LIC for more funding to meet its short-term requirements such as salaries, and vendor and rental payments.

It is understood that Satyam still requires a similar amount in the near term. Asked whether LIC is planning to up its holding in Satyam, the source said the company would watch the situation in Satyam before taking any decision. LIC now holds a 4.24 % stake in Satyam. “Satyam has an eminent board (including LIC’s executive director S B Mainak) that has brought back the confidence ... they have good receivables and a strong client base ... It appears that things are going well (in Satyam),” the official said.

Asked whether LIC planned to up its stake in L&T, which has reportedly evinced interest in acquiring Satyam, the official declined to comment.