Money & Banking

Yes Bank Board to raise $2 billion through preferential allotment of shares

Our Bureau Mumbai | Updated on November 30, 2019

Private sector Yes Bank plans to raise about $2 billion dollar through preferential allotment of shares.

“The Board of Directors … has taken note that the following investors have individually expressed their agreement/ willingness to subscribe to equity shares of the bank for an aggregate amount of $2 billion which shall be undertaken on a preferential allotment basis,” it said in a late night regulatory filing on Friday.

Canadian billionaire Erwin Singh Braich or SPGP Holdings is interested in buying $1.2 billion. “Discussions with investor ongoing and expected to be concluded shortly. In the meantime the Binding Term Sheet extended till December 31,” Yes Bank said.

Other proposed investors include Citax Holdings Ltd and Citax Investment Group which is keen to invest $500 million. The bank also said that a top tier US fund house is willing to invest $120 million and its name will be disclosed early next week.

Other interested investors include GMR Group and Associates, who wants to invest $50 million, Aditya Birla Family Office and Rekha Jhunjhunwala who are keen to pledge $25 million each.

Foreign institutional investors Discovery Capital and Ward Ferry are willing to invest $50 million and $30 million, respectively.

“The Board of Directors shall reconvene on December I0, 2019 to finalise and approve the details of the preferential allotment and convene an extra-ordinary general meeting subsequently, to obtain the approval of the shareholders,” Yes Bank said, adding that the preferential allotment shall be subject to receipt of all regulatory and statutory approvals.

The troubled lender has been working to raise funds as it looks to shore up its capital base. Its CET - I ratio stands at 8.7 per cent, which is just above the regulatory requirement of 8 per cent.

The bank had on October 31 said it has received a binding offer from a global investor for an investment of $ 1.2 billion through fresh issuance of equity shares.

It had received approval from Reserve Bank of India to go ahead with the proposed increase in its authorised share capital on September 27 this year.

Prior to that, its Board had approved a proposal to “raise growth capital” by increasing the authorised share capital of the bank to ₹1,100 crore from the current ₹ 800 crore.

Yes Bank scrip closed 2.5 per cent lower at Rs 68.30 apiece on BSE on Friday.

Published on November 30, 2019

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