A clutch of top private equity guns, including Carlyle and Apax Partners, have shown interest in buying a large stake in Patni Computers, but the success of their venture depends on whether they can win crucial management rights and also secure the co-operation of Narendra Patni, the CEO and chairman.
Mr Patni, who is believed to be interested in continuing in his position after the exit of his brothers, has employment contracts that protect his interests till 2013.
According to the prospectus filed with the Securities and Exchange Commission (SEC) prior to its ADR issue on the NYSE, Mr Patni’s (Narendra) term as the chairman of the board of directors of his company ends in December 2008. However, he still has the option to continue for another 5 years in the same position in Patni Computers. Also, since Mr Patni’s consultancy agreement has been extended by the board of directors, he would also be able to continue as the CEO of the company till 2010. This is crucial to any new investor for the company, as they then would have to strike some kind of a compromise with Mr Patni in order to run the company.
Read more in The Economic Times article.
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