Govt plans Rs 2000 Cr bailout package for Satyam

The Central Government is looking at a salary bailout for the 53,000 Satyam Computer Services employees.

A Rs 2,000 crore package is under consideration to ensure that Satyam employees get their salary on time after it the new board said that they are looking for funds.

 

The sources said that the government is looking at giving three instalments of Rs 500 crore to Satyam for the next three months and is planning another infusion of about Rs 400 crore.

 

Prime Minister Manmohan Singh met senior Cabinet ministers and officials at his residence to discuss the over Rs 7,000 Satyam scandal where the bailout package was finalised.

Here is a verbatim transcript of Abhijit Neogy's comments on CNBC-TV18. Also watch the accompanying video.

This particular meeting with the Prime Minister chaired with Senior Cabinet Ministers definitely discussed the liquidity issue that Satyam is facing. There was always talk about whether government can lend indirect financial assistance, I think this meeting put numbers to it.

They have possibly taken a rough average of salary bill to the extent of Rs 500 crore to Rs 520 crore and then they have said that can we take this assistance down the line 2-3 months, which actually inflates this assistance to somewhere between Rs 1,500 crore to Rs 1,560 crore, add working capital expenses of Rs 400 crore, so that could mean an indirect facilitation of Rs 2,000 crore. This is just a proposal it is far from finalized.

There is another view within that meeting that perhaps the government does not want to get in too much into this financial assistance and perhaps it is just two months that government should indirectly facilitate and get out of it. Now none of the views have yet crystallized but initial figures indicate that government is going the distance and there is a Prime Ministerial mandate to save Satyam at any cost with 50,000 employees.

So, there is some sort of figure which will be put to it in the coming days. The Cabinet Secretary is on the job we understand and if at all this modus operandi does work, then perhaps designated public sector banks will be ask to offer credit.