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| Satyam settles row with Caterpillar |
| BS Reporter / Hyderabad Jun 10, 2009, 01:02 IST |
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The dispute between the scam-hit Satyam Computer Services Ltd and Caterpillar Inc (CAT), a US-based manufacturer of construction & mining equipment, diesel & natural gas engines and industrial gas turbines, has been settled “amicably”.
Confirming the development, a Satyam spokesperson said: “The issue has been settled between Satyam and Caterpillar, with no further liability on either side.”
Satyam had, on April 21, 2008, announced its plans to acquire the market research and customer analytics business unit from CAT for a total consideration of $60 million (approximately Rs 300 crore), comprising an initial payment of $10 million (Rs 50 crore), which Satyam paid to the seller on August 6, 2008, besides issuing a $50-million (Rs 250 crore) promissory note.
As of November 14, 2008, the IT outsourcing company had paid $20 million (initial payment of $10 million and an equal amount under the promissory note) to CAT.
Following the January 7, 2009 resignation of Satyam founder B Ramalinga Raju, CAT served a legal notice on Satyam notifying the company of the termination of its asset purchase agreement and transition services agreement with CAT, each dated April 21, 2008, and demanding the immediate payment of the unpaid principal balance of $40 million due under the promissory note. Both the parties began negotiating to amicably resolve the outstanding issues in March 2009.
On the payments to US-based consulting firm Bridge Strategy Group and Belgium-based supply chain management consultant firm S&V Management Consultants, which demanded $6 million and ¤1 million respectively from Satyam, the spokesperson said: “There are no specific timelines and the company is actively engaged in discussions with both the parties.”
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