Satyam to spend $40 mn on expansion

IT solutions provider Satyam Computer Services anticipates a capital expenditure of $40 million during the calendar year 2005 for its expansion activities.

The company, in its recent filing with the Securities and Exchange Commission (SEC), stated that the anticipated capital expenditure is principally to finance construction of new facilities in its existing offshore centres, expansion of facilities in offshore centres in India and establishing new overseas offsite centres.

The company believes that its existing funds generated from operations will be sufficient to meet the anticipated capital expenditure requirements.

Satyam has its offshore IT centres in India and Australia, Canada, China, Hungary, Japan, Malaysia, Singapore, UAE, UK besides the US.

The SEC filing said Satyam plans on opening additional international facilities.

The company has been over the past decade making substantial investments in its infrastructure, processes and systems across its 20 development centres offering the offshore, offsite, nearshore and onsite services.

Satyam added in the filing that the contractual commitments as of December 31, 2004, were approximately $6.4 million for capital expenditures.

Cashing in on the positive global trend towards offshoring, Satyam had towards the end of last year announced a sponsored American depository shares issue of $360 million.

Satyam has entered into a string of tie-ups with the latest one being a global partnership with Zycus, a provider of spend data management software.

According to the plan, Satyam will offer implementation and system integration services around Zycus's entire product suite.

The list of tie-ups includes running SAP at Bridgestone Corp, Europe "" a subsidiary of Bridgestone, Japan. Satyam will provide application maintenance and support services to Bridgestone Europe for three years.