The Hindu Business Line : Buying out investors’ stake in Nipuna Services

Hyderabad, Oct. 23 Satyam Computer has purchased Olympus Capital stake in its business process outsourcing (BPO) arm Nipuna Services and is negotiating with its other investor Intel Capital for possible buy out of stake.

Olympus Capital and Intel Capital had together invested $20 million in Nipuna that included $10 million in equity and $10 million through preferential shares. Based on the contractual arrangement, Satyam is now exercising option to buy their stake. Soon the balance stake of Intel Capital would be negotiated.

The Chief Financial Officer of Satyam, Mr Vadlamani Srinivas, said: “Satyam stake in Nipuna is now 96 per cent and we expect to close the Intel deal also shortly by acquiring the rest of stake.”

The enterprise value of Nipuna is estimated at $184 million and Satyam paid $46.5 million for 25 per cent stake and expects to conclude the buyout of rest of the stake by December, he said.

Alongside, the company plans to change the name of Nipuna Services to Satyam BPO, as this presents a uniform brand and would help Satyam to leverage the combined strengths, Mr Srinivas said.

Referring to Nipuna’s performance, Mr Srinivas said the company posted a revenue of $15.2 million and a net loss of $1.18 million during the second quarter. The company has given a guidance of $61 million for the financial year 2007.

The Satyam Chairman, Mr B. Ramalinga Raju, said: “most of Nipuna clients have come through Satyam. Increasingly, clients prefer an integrated services provider. We believe by rebranding and offering both IT and BPO services, we would be able to align our resources better.”

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